Systems, methods and program products for deposit and withdrawal processing

ABSTRACT

Method, system and program product, the system comprising: computer programmed for accessing databases comprising: aggregated deposit account information for plurality of FDIC-insured aggregated deposit accounts held in plurality of depository institutions; and client account information; obtaining fund transfer instructions; allocating fund amounts for other depository institutions; generating data for depositing funds to or withdrawing funds from at least one aggregated deposit account multiple times in a month period, comprising generating data for instructions for making a withdrawal from one depository institution more than six times during the month period, using methods: in person, by mail, messenger, telephone, automated teller machine, for withdrawals except for a set of at least 1-6 withdrawals within last six business days of the month period, and presenting instructions to depository institution using method that counts against a 6 withdrawal limit for this set of the withdrawals during the last six business days of month.

CROSS-REFERENCE TO RELATED PATENT APPLICATIONS

This application is a Continuation of U.S. application Ser. No.12/974,974 filed Dec. 21, 2010 which is a Continuation-In-Part of U.S.application Ser. No. 12/340,026, filed Dec. 19, 2008, which claimspriority from Provisional Application U.S. Application 61/027,643, filedFeb. 11, 2008. U.S. application Ser. No. 12/974,974 is also aContinuation-In-Part of U.S. application Ser. No. 12/829,961, filed Jul.2, 2010, which is a Continuation of U.S. application Ser. No.11/689,247, filed Mar. 21, 2007. U.S. application Ser. No. 11/689,247claims priority from Provisional Application U.S. Application60/892,107, filed Feb. 28, 2007 and from Provisional Application U.S.Application 60/895,320, filed Mar. 16, 2007. All of the aforesaidapplications are incorporated herein by reference in their entirety asif fully set forth herein.

This application incorporates by reference, in their entirety, but doesnot claim priority to U.S. Pat. No. 6,374,231, and application Ser. No.09/677,535 filed Oct. 2, 2000, now U.S. Pat. No. 7,752,129; Ser. No.10/071,053 filed on Feb. 2, 2002, now U.S. Pat. No. 7,519,551; Ser. No.10/305,439 filed on Oct. 26, 2002, now U.S. Pat. No. 7,680,734; Ser. No.10/382,946 filed on Mar. 6, 2003, now U.S. Pat. No. 7,536,350; Ser. No.10/411,650 filed on Apr. 11, 2003, now U.S. Pat. No. 7,509,286; Ser. No.11/641,046 filed on Dec. 19, 2006.

SUMMARY OF EMBODIMENTS

In one embodiment, a method is disclosed, comprising: (a) maintaining orhaving maintained or accessing, by one or more computers, an electronicdatabase, on one or more computer readable media, comprising: (i)aggregated deposit account information for one or more of governmentbacked-insured and interest-bearing aggregated deposit accounts, held inone or more depository institutions, comprising at least a firstdepository institution, each of the one or more aggregated depositaccounts holding funds of more than one client; (ii) client accountinformation for a plurality of client accounts for a plurality ofclients whose funds had been accepted for deposit in the names of therespective clients at the first depository institution; (b) obtaining aplurality of net credit/debit amounts during a month period, with eachrespective net credit/debit amount comprising a sum of credits to and/ordebits with respect to multiple of the client accounts for a respectivesub-period of the month; (c) generating data for depositing/transferringfunds to or withdrawing/transferring funds from at least one of the oneor more aggregated deposit accounts multiple times in a month period,based at least in part on one or more of the net credit/debit amountsfor one or more sub-periods of time, the data generating step comprisinggenerating data for instructions for making a withdrawal/transfer fromfunds held at one of the one or more depository institutions more thansix (6) times during the month period, comprising presentinginstructions to the respective one depository institution using one ormore of the methods: in person, or by mail, or by messenger, or bytelephone and distributed by mail, or by automated teller machine, or acombination thereof for substantially all of the withdrawals/transfersexcept for a set of at least one but not more than six withdrawalswithin a last six business days of the month period, and presentinginstructions to the respective one depository institution using a methodthat counts against a 6 withdrawal limit for this set of the withdrawalsduring the last six business days of the month period; and (e) updatingor having updated, by the one or more computers, the electronic databaseto reflect changes in client funds held in the one or more aggregateddeposit accounts.

In a further embodiment, the instructions for withdrawal/transfer thatcount against a 6 withdrawal limit are presented in each of the last 5business days of the month and are presented by electroniccommunication.

In a further embodiment, the government backed insurance is FederalDeposit Corporation Insurance.

In a further embodiment, the one or more depository institutionscomprises only the first depository institution.

In a further embodiment, the one or more depository institutionscomprise a plurality of depository institutions.

In a further embodiment, the one or more depository institutionscomprise a plurality of depository institutions, and wherein thegenerating data for instructions to deposit/transfer funds to orwithdraw/transfer funds from the one or more aggregated deposit accountsbased at least in part on one or more of the net credit/debit amountsfurther comprises: transferring funds of a respective client only to oneor more depository institutions which hold less than a specified amountof the funds of the respective client account.

In another embodiment, a method is disclosed, comprising: maintaining orhaving maintained or accessing, by one or more computers, one or moreelectronic databases, stored on one or more computer-readable media,comprising: (i) aggregated deposit account information for a pluralityof respective government-backed insured and interest-bearing aggregateddeposit accounts held in a plurality of depository institutionsparticipating in a program, with the aggregated deposit accountsproviding non-penalized liquidity for the funds held therein, each ofthe one or more aggregated deposit accounts holding funds of more thanone client; and (ii) client account information for a plurality ofclient accounts, the client account information for a respective one ofthe client accounts comprising a balance of client account funds held ineach of one or more of the aggregated deposit accounts holding funds ofthe respective client account; and accessing client account datacomprising changes to client account funds sourced to the program from aplurality of source financial entities and held or to be held in thedepository institutions in aggregated accounts held therein; allocating,by the one or more computers, fund amounts to the depositoryinstitutions to be held in the aggregated deposit accounts therein basedat least in part on the client account data for the client account fundsand one or more rules; generating data for depositing/transferring fundsto or withdrawing/transferring funds from at least one of the aggregateddeposit accounts multiple times in a month period, based at least inpart on the accessed client account data, the data generating stepcomprising generating data for instructions for making awithdrawal/transfer from funds held at one of the depositoryinstitutions more than six (6) times during the month period, comprisingpresenting instructions to the respective one depository institutionusing one or more of the methods: in person, or by mail, or bymessenger, or by telephone and distributed by mail, or by automatedteller machine, or a combination thereof for substantially all of thewithdrawals/transfers except for a set of at least one but not more thansix withdrawals within a last six business days of the month period, andpresenting instructions to the respective one depository institutionusing a method that counts against a 6 withdrawal limit for this set ofthe withdrawals during the last six business days of the month period;and updating or having updated, by the one or more computers, the one ormore electronic databases to reflect changes in client account fundsheld in the aggregated deposit accounts.

In a further embodiment, the instructions for withdrawal/transfer thatcount against a 6 withdrawal limit are presented in the last 5 businessdays of the month and are presented by wire.

In a further embodiment, the method of presentation of the instructionsfor withdrawal/transfer that counts against the 6 withdrawal limit is byan electronic method.

In a further embodiment, one of the one or more rules for allocationcomprises allocating funds of a respective client account only to one ormore depository institutions which hold less than a specified amount ofthe funds of the respective client account.

In a further embodiment, one of the one or more rules for allocationcomprises allocating funds to respective depository institutions so asnot to exceed a maximum cap for the respective depository institutionand/or not to go below a minimum cap for the respective depositoryinstitution.

In a further embodiment, one of the one or more rules for allocationcomprises allocating funds to a respective one of the depositoryinstitutions based, at least in part, whether the one depositoryinstitution has sourced funds to the program which are held in one ormore other of the depository institutions.

In a further embodiment, one of the one or more rules for allocationcomprises allocating funds to a respective one of the depositoryinstitutions based, at least in part, on an amount of funds the onedepository institution has sourced funds to the program which are heldin one or more other of the depository institutions.

In a further embodiment, one of the one or more rules for allocationcomprises allocating an amount of funds to a respective one of thedepository institutions based, at least in part, on an amount of fundsthe one depository institution has sourced funds to the program whichare held in one or more other of the depository institutions.

In a further embodiment, a step is performed comprising: allocating,using the one or more computers, fund amounts of client accounts amongthe aggregated deposit accounts, to substantially match the respectivefund amounts allocated to the aggregated deposit accounts based at leastin part on the client account data for the client account funds and oneor more rules.

In a further embodiment, the method steps are performed by aself-clearing broker dealer, and wherein the accessing client accountdata comprises receiving deposit and/or withdrawal sweep data from oneor more other broker dealers, with the deposit and/or withdrawal sweepdata comprising deposit and/or withdrawal data for the respectivecustomers holding customer accounts with the one or more broker dealers.

In a further embodiment, the self-clearing broker dealer performs thesteps: maintaining the plurality of government backed-insured andinterest-bearing aggregated accounts in the depository institutions,with at least one of the aggregated accounts at one of the depositoryinstitutions holding funds of multiple of the broker dealers;performing, by the one or more computers, an electronic accountingfunction on a substantially periodic basis based on client account dataassociated with the respective broker dealers, wherein the electronicaccounting function is performed for the client accounts of theassociated broker dealer based on the one or more parameters associatedwith the respective broker dealer or the respective customer.

In a further embodiment, the one or more accounting parameters comprisea type of rate to be paid one or more client accounts associated withthe respective broker dealer.

In a further embodiment, the one or more accounting parameters comprisea tier of a rate chart to be paid on funds of client accounts associatedwith the broker dealer.

In a further embodiment, the one or more accounting parameters compriseone or more levels of FDIC insurance associated with client accountsassociated with the respective broker dealer.

In a further embodiment, the one or more accounting parameters compriseone or more depository institutions that are associated with the clientaccounts associated with a respective one of the respective brokerdealers for holding funds of those client accounts or are prohibitedfrom holding funds of those client accounts.

In a further embodiment, the one or more accounting parameters compriseone or more of the depository institutions that are associated with onlya subset of the broker dealers for holding funds of only the subset ofthe broker dealers or are prohibited from holding funds of the subset ofthe broker dealers.

In a further embodiment, the one or more accounting parameters comprisea preferred method for customer initiated/late day transactions.

In a further embodiment, a step is performed of replacing at least aportion of money withdrawn of one of the broker dealers from one of thedepository institutions by depositing money from another of the brokerdealers into the one depository institution.

In a further embodiment, the self clearing broker dealer maintains anaccounting electronic database, on one or more computers, containinginformation on one or more accounting parameters to be applied whenperforming accounting functions relating to funds of a plurality of theclient accounts of a plurality of the broker dealers.

In a yet further embodiment, a method is disclosed, comprising:maintaining or having maintained or accessing, by one or more computers,one or more electronic databases, stored on one or morecomputer-readable media, comprising: (i) aggregated deposit accountinformation for a plurality of respective government-backed insured andinterest-bearing aggregated deposit accounts held in a plurality ofdepository institutions participating in a program, with the aggregateddeposit accounts providing non-penalized liquidity for the funds heldtherein, each of the one or more aggregated deposit accounts holdingfunds of more than one client; and (ii) client account information for aplurality of client accounts, the client account information for arespective one of the client accounts comprising a balance of clientaccount funds held in each of one or more of the aggregated depositaccounts holding funds of the respective client account; and accessingclient account data comprising changes to client account funds sourcedto the program from a plurality of source financial entities and held orto be held in the depository institutions in aggregated accounts heldtherein; allocating, by the one or more computers, fund amounts to thedepository institutions to be held in the aggregated deposit accountstherein based at least in part on the client account data for the clientaccount funds and one or more rules; generating data fordepositing/transferring funds to or withdrawing/transferring funds fromat least one of the aggregated deposit accounts multiple times in amonth period, based at least in part on the accessed client accountdata, the data generating step comprising generating data forinstructions for making a withdrawal/transfer from funds held at one ofthe depository institutions more than six (6) times during the monthperiod, comprising presenting instructions to the respective onedepository institution using one or more of the methods: in person, orby mail, or by messenger, or by telephone and distributed by mail, or byautomated teller machine, or a combination thereof for substantially allof the withdrawals/transfers except for a set of at least one but notmore than six withdrawals within the month period, and presentinginstructions to the respective one depository institution using a methodthat counts against a 6 withdrawal limit for this set of the withdrawalsduring the month period; and updating or having updated, by the one ormore computers, the one or more electronic databases to reflect changesin client account funds held in the aggregated deposit accounts.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is schematic block diagram of one embodiment.

FIG. 2 is schematic block diagram of a flowchart of operations for oneembodiment.

FIG. 3 is a schematic block diagram of an electronic system forimplementing one or more of the embodiments of the invention.

FIG. 4 is a schematic block diagram of a further embodiment.

FIG. 5 is a schematic block diagram of a flowchart of operations for afurther embodiment.

FIG. 6 is a schematic block diagram of a flowchart of operations for afurther embodiment.

DETAILED DESCRIPTION OF THE EMBODIMENTS

The following terms used in this application are intended to have themeaning as described herein:

“aggregated account” comprises an account at a depository institutionfor holding funds for a plurality of clients from one or more financialentities. The aggregated account may be a segregated account that onlyholds the funds for a plurality of clients of a single financial entitythat may or may not be self-clearing. Alternatively, the aggregatedaccount may hold the assets for a plurality of clients of a plurality offinancial entities which may utilize the clearing services provided by aself-clearing financial entity or a management institution, dependingupon the program.

“broker dealer” is intended to take its ordinarily understood meaning inthe art to cover entities offering programs such as brokerage advisors,investment advisors, broker dealers, management institutions and thelike. A broker dealer may maintain one or more customer accounts onbehalf of one or more customers for receiving funds deposited thereto,and for debiting checks or other financial instruments drawn againstthat account.

“self clearing broker dealer” is intended to take its ordinarilyunderstood meaning in the art to cover broker dealers that performclearing services for other broker dealers and/or for their owncustomers. Such clearing services could comprise ensuring the cashdeposits from the other broker dealers were deposited in one or moreprogram banks, performing accounting functions with respect to theseincoming and outgoing funds, and performing or having performedreconciliation processing to determine for each of a plurality ofcustomers, that a balance in a customer account after deposit and/orwithdrawal transactions equals the amount associated with the respectivecustomer in one or more of the program banks. Note that a self clearingbroker dealer may only be a self clearing broker dealer (provideclearing services) for some transactions, and not for others. Forexample, a broker dealer could be a self clearing broker dealer only forcash, and not for equities transactions, or could be responsible for allor a subset of clearing functions except cash for his customers thatparticipate in an insured deposits program, and could be for allcustomer accounts or a select group of accounts.

“holdback bank” is a bank that has agreed to a temporary withdrawal offunds from its account which may be later used to settle late daycustomer service and fee transactions, for example,cards/checks/ACH/fees, to name a few, that may be available forprocessing after the daily bank settlement deadline, typically 4:00 pm.The holdback withdrawal may be factored into the first runs and/or laterruns of the bank allocation process on the sweep files, e.g., subtractedfrom credits to reduce the deposits to be allocated or added to debitsto increase the dollar amount withdrawn from the holdback bank.

“program” is a deposit arrangement to obtain FDIC insurance for accountbalances over the FDIC insurance limit for a single account through theuse of a plurality of aggregated accounts, with aggregated accounts indifferent program banks.

“program bank” is any bank, savings institution or other financialentity that holds an aggregated account in the program and that hasgovernment backed insurance.

“depository institution” means any institution which is authorized toaccept deposits and issue certificates of deposit. This would includestate and national banks, state and federal savings banks, savings andloan associations, credit unions, and probably some industrial loancompanies, depending on current law. Most but not necessarily all, wouldhave government backed-insurance, such as Federal Deposit InsuranceCorporation (FDIC) insurance, or the National Credit Union ShareInsurance Fund (NCUSIF) for credit unions, or state insurance.

“client account” refers to client funds, such as, for example,consisting of funds of the client designated or determined formanagement by the deposit management system, to be described.

In some deposit systems, one entity may play the role of one or more ofthe above. For example, a source financial entity, such as a bank, mayalso be a depository institution. Similarly, a source financial entity,like a broker-dealer, or a bank, may be affiliated with one or more ofthe depository institutions.

An administrator for program may be a source financial entity, adepository institution, a clearance bank, and/or another entityparticipating in deposit sweep functions or another managing entity.Likewise, a particular program may have one source financial entity ormany source financial entities. Similarly, a particular program may haveone depository institution or many depository institutions.

FIGS. 4, 5 and 6 illustrate embodiments with reference to the inventionsdescribed in application Ser. No. 10/071,053, now U.S. Pat. No.7,519,551, and Ser. No. 10/382,946, now U.S. Pat. No. 7,536,350, thatare incorporated by reference into this application. These embodimentsare not limited to self clearing broker dealer operations, but use anytype of source institution and may be performed by a variety ofdifferent entities.

In one embodiment, to a system and method is described for managingdeposits and withdrawals from among a plurality of aggregated accountsheld at a plurality of depository institutions in order to obtaingovernment backed insurance above the limit set for individual accounts.In a further embodiment, the invention relates to a system and methodfor managing the transfer of client funds received from one or morefinancial entities by controlling the deposits to and withdrawals fromamong a plurality of aggregated accounts held at a plurality ofdepository institutions in order to obtain certain results. In oneembodiment, the deposits and withdrawals are managed to strive to obtainbalances in one or more aggregated accounts in one or more destinationdepository institutions associated with a financial entity(s) or programthat are above the respective minimum caps for the respective depositaccounts at the different respective depository institutions. In afurther embodiment, the deposits and withdrawals are managed to striveto obtain balances in one or more aggregated accounts held in one ormore destination depository institutions associated with a financialentity(s) or program that fall between respective min and max caps foreach respective aggregated account at the respective depositoryinstitutions. In yet a further embodiment, the deposits and withdrawalsare managed to strive to obtain balances in a plurality of aggregatedaccounts associated with different programs but in the same depositoryinstitution, but managed by the same management institution, above aminimum cap associated with the depository institution. In a furtherembodiment, the deposits and withdrawals are managed to strive to obtainbalances, that once reached in one or more aggregated account, are heldstable with limited or no account activity.

In yet a further embodiment, the deposits and withdrawals from thedeposit accounts are managed to ensure that no more than a predeterminedamount, such as for example, $250,000, associated with a given client isheld in any one depository institution. In a further embodiment, thedeposits to and withdrawals from the aggregated accounts are managed toobtain a hold back amount to be used to cover late transactions afterthe closing time. In yet a further embodiment, a reconciliation processensures that client balances reflected in the records maintained byfinancial entities for their participating clients are equal to theclient balances reflected in a management institution's records forthose same participating clients, and that aggregate balances maintainedin aggregated accounts at respective depository institutions are inbalance with an aggregate balance of the individual client balancesreflected in the management institution records and the financial entityrecords. On a daily basis or other periodic basis, this reconciliationprocess in one embodiment includes comparing the aggregate balances forclients maintained by the management institution to the positionmaintained at the financial entity for each of its clients, comparingthe aggregate balance at each depository institution maintained by themanagement institution to the actual aggregate balance at eachdepository institution, and in addition a control operating account inan intermediate bank used for facilitating fund transfers is reconciledto ensure the correct money movements as specified by the variousdepository institution allocations has taken place. In yet a furtherembodiment, the minimum and/or maximum caps are varied to manage theamount of net assets in an affiliated depository institution.

FIG. 4 is a block diagram, taken from Ser. No. 11/689,247 filed Mar. 21,2007 that is incorporated by reference herein, of a system forallocating deposits to and withdrawals from aggregated accounts,generally designated by reference number 1, according to an exemplaryembodiment of the present invention. The system 1 includes a number offinancial entities FE1-FEn, each managing one or more programs, such asinsured deposit products, for example. Each program may include one ormore insured deposit products, each having different attributes, such asinsurance level, different tier options and rates paid and services. Inone embodiment, the rates paid may be determined by such factors as thebalance in the client's insured account, or can be determined by thetotal value of the client's brokerage account, or determined by thetotal value of a group of accounts for a particular household together,or determined by relationship pricing based on the number of products aclient uses though a financial entity or sister entities, to name a few.Each financial entity FE1-FEn may have a plurality of clients C1-Cm thatinvest in particular products that make up part of a particular program.The clients C1-Cm may be individuals or corporations or any other formof entity. Thus, for example, a financial entity FE1 may manage a numberof programs designated in FIG. 1 as PROGRAM FE1-1, PROGRAM FE1-2, . . .PROGRAM FE1-p, where each client C1-Cm of the financial entity FE1invests in at least one of the products under at least one of theprograms PROGRAM FE1-1-PROGRAM FE1-p. Examples of different kinds ofprograms that may be offered, include a program with cash managementservices, a program for high net worth individuals with a higher minimumbalance required, a program paying a lower rate and offering moreservices, a no frills program with a higher rate and no services,however for a fee the client could get other services, to name a few.

The system 1 also includes a number of depository institutions DI1-DIq,into which funds are deposited. Depository institutions DI1-DIq may be,for example, banks or credit unions, or other types of depositoryinstitutions. Preferably, at least some of depository institutionsDI1-DIq are government backed insured, e.g., insurance from the FederalDeposit Insurance Corporation (FDIC). However, not all depositoryinstitutions need be government backed insured. For example, certainprograms can also default to a money fund, or other uninsured depositaccount, if the client's account balance is over the government backedinsurance limit for that program. While the basic federal insuranceamount is currently $250,000, more than $250,000 of coverage can beobtained if funds are maintained in different ownership categories,according to the FDIC. For example, coverage of up to $250,000 can beobtained for individual accounts at a depository institution, another$250,000 for each share of joint accounts at the same depositoryinstitution, and yet additional insurance for retirement accounts heldat the same depository institution. Moreover, by depositing funds atmore than one government backed insured depository institution,multiples of $250,000 of coverage can become protected by federalinsurance. For example, if deposits are made to 10 government backedinsured depository institutions, with no more than $250,000 for eachownership category deposited in each of said 10 government backeddepository institutions, then $2,500,000 of effective federal insurancecan be obtained for each ownership category.

In a variety of embodiments, direct deposits to and direct withdrawalsfrom aggregated deposit accounts are performed. However, in oneembodiment, a financial entity, or a management institution 10, actingas agent for the financial entity (to be discussed later) manages ineach depository institution (e.g., bank or saving institution) anaggregate money market deposit account (MMDA) and an aggregate demanddeposit account (DDA), both being in the identical name of financialentity, or its agent (referred to herein as an “MMDA-DDA pair”) or thelike. In response to deposit and withdrawal transactions by or on behalfof clients, the financial entity or its agent initiates transfers offunds between the MMDA-DDA pairs, so that if the aggregate deposits ofall clients for that financial entity or program exceed the aggregateclient withdrawals (net client credit), then all or some of the fundsmay be deposited directly in the MMDA at the depository institution or,in an alternative embodiment, by way of the DDA in the MMDA-DDA pair.Conversely, if client withdrawals for all clients of that financialentity or Program exceed client deposits (net client debit), then thedepository institution may be instructed by messenger or otherwise totransfer funds from the aggregate MMDA to the DDA.

As noted, the MMDAs are interest-bearing, insured deposit accounts,collectively in which the managed balances for clients are deposited.The DDAs, which are deposit accounts permitting an unlimited number ofdeposits and withdrawals, serve to facilitate the exchange of fundsbetween the MMDAs, the depository institutions, and sources of clienttransactions (referred to herein as “transaction sources”). If thefinancial entity or the management institution 10 determines that it isnecessary to move funds from a particular MMDA (at a particulardepository institution), it first causes a messenger or otherwise tohave these funds transferred from the MMDA to the DDA member of theMMDA-DDA pair, and second, causes the funds in the DDA to be moved tothe financial entity's or its agent's own account or accounts. Then,from these accounts, funds may be further transferred to a third party,such as a transaction source or a customer financial entity (preferablyby electronic or other automatic means). If funds are to be moved into aparticular MMDA, the agent either may have them deposited into theassociated DDA and then moved into the MMDA, or may have them depositeddirectly into the MMDA. The agent database is updated to reflect thesefunds transfers.

While in a preferred embodiment, a separate account or set of accounts,e.g., money market deposit accounts (MMDA), demand deposit account(DDA), are set up for each program for each financial entity, undercertain embodiments of the present invention different programs of thesame financial entity or different financial entities can be commingledand aggregated. Note that a financial entity does not have to set up aseparate money market deposit account (MMDA) and associated demanddeposit account (DDA) for each program at the depository institution,i.e., the same MMDA and/or DDA can be used across several programs ifregistered, e.g., in the name of and offered by the same self clearingfinancial entity or the like. Similarly, a single MMDA or other type ofaccount can be set up at each depository institution, or more than twoaggregated accounts can be set up at each depository institution. If afinancial entity is a clearing firm that provides clearing services forother financial entities (correspondents), it is not necessary for thecorrespondents to set up a segregated MMDA and DDA for their respectiveprograms. Note that it is not necessary for each financial entity,whether a bank or other entity, to set up segregated aggregated accountsat the depository institution. Rather a management institution 10 couldact as an agent for a group of such financial entities so that assetsfor several financial entity banks or other entities can be held in thesame MMDA and DDA registered in the name of the management institutionat each depository institution DI1-Diq or the like. But if the sameprogram is being offered by different financial entities, separateaccounts are used for each financial entity that is a self clearingfinancial entity. Note that a self clearing financial entity is definedas a financial entity that provides clearing services for his clientsonly and/or provides clearing services for other financial entities thatare not self clearing but correspondents of the self clearing financialentity. The deposits for the clients of the correspondent financialentities would be held in the self clearing financial entity's MMDA thatis held in a depository institution associated with that self clearingfinancial entity. Thus, for example, if depository institution DI1participates in three programs each run by a different self clearingfinancial entity, the depository institution DI1 may have threesegregated aggregated accounts, each aggregated account associated witha different self clearing financial entity. The segregated aggregatedaccounts are preferably money market deposit accounts (MMDAs) registeredin the name of the financial entity that manages the program associatedwith the MMDA or the like. However, any other suitable investmentaccounts may be used, such as NOW accounts for individuals, or DDA's.Moreover, more than one type of account could be used, e.g., anaggregated MMDA and an aggregated DDA at each depository institution. Insome embodiments as noted above, a management institution 10 may beprovided within the system 1 that could maintain account information foreach of the financial entities (FE1, FE2, . . . FEn) and others in adatabase within its own system or have such a database maintained forits use.

In embodiments comprising a management institution, the managementinstitution 10 is configured to allocate and manage deposits,withdrawals and other transactions relating to each of the accounts ineach of the depository institutions DI1-DIq. Thus, the managementinstitution tracks the net activity for the aggregated accountsmaintained by the financial entity or the management institution 10itself at the depository institutions DI1-DIq based on information sentfrom the financial entities FE1-FEn to the management institution 10and/or from other appropriate sources via contract or otherwise. Themanagement institution 10 maintains records or has maintained for itrecords on each financial entity and their respective clients with fundsin depository institutions managed by the management institution 10,whether the financial entity is self clearing or not. Thus, in oneembodiment, the management institution 10 maintains account records forall of the client accounts associated with the financial entities withfunds managed by the management institution 10. As explained more fullybelow, the management institution 10 may automatically generate reports,for example in the form of e-mail messages, text messages, faxes, etc.,advising the financial entities FE1-FEn of the day's net activity for aspecific account in a specific depository institution DIq holding fundsfor that financial entity, and/or activity in one or more clientaccounts of that financial entity. If more than one account ismaintained at a depository institution DI1-DIq, each account may besettled separately. The management institution 10 maintains or hasmaintained for it computer software and/or hardware 20 located at themanagement institution site, or at a remote site that is incommunication with the management institution 10, that maintainsdatabases and other program functions to track the activities in thevarious aggregated accounts in each depository institution DI1-DIq.Examples of such computer software and/or hardware will be discussedbelow.

An intermediary bank 30 may be incorporated as part of the system 1 tooversee and facilitate the transactions to and from the variousaggregated accounts based on management institution 10 allocations. Theintermediary bank 30 may either be the same as or separate from themanagement institution 10. In embodiments where the managementinstitution 10 and the intermediary bank 30 are separate entities, theymay be in substantially constant electronic communication. Theintermediary bank 30 includes one or more control operating accounts,for example, one control operating account per self clearing financialentity. In one embodiment, the management institution 10 also maintainsrecords of deposits, debits and balances for each client of a financialentity with funds in a control operating account, whether or not thatfinancial entity is a self clearing financial entity. At the end of aperiod of time, such as 2-4 hours, or a day, for example, the balance offunds in each of the control operating accounts at the intermediary bank30 are transferred to or from one or more of the depository institutionsDI1-DIq. Note that in some embodiments where the self clearing FI's arenot banks, self clearing financial entities use the intermediary bank toexecute the wires, i.e., to send and receive wires/funds from thedepository institutions.

According to various exemplary embodiments of the method of the presentinvention, each depository institution DI1-DIq may be assigned a minimumdeposit cap (Min Cap), a maximum deposit cap (Max Cap), and an absolutecap (Absolute Cap). These caps are used to determine which depositoryinstitutions to select in an allocation process for a sweep file netdeposit or withdrawal, to be discussed below. These caps may remain thesame or be reset as appropriate.

“Min Cap” is the minimum deposit amount to be maintained either in agiven aggregated account at a destination depository institution, or theminimum deposit amount to be maintained over a plurality of aggregatedaccounts at a destination depository institution. In one embodiment, theminimum cap may be negotiated for an individual aggregate account at adepository institution. If there is only one aggregated account at thedepository institution, then this minimum pertains/is associated withthe overall depository institution. In another embodiment, a managementinstitution may manage a plurality of different programs for itscustomer financial entities, with each different program having aplurality of destination depository institutions for depositing fundsthereamong for that program or financial entity, wherein there may be anoverlap in the destination depository institutions of the programs. Themanagement institution may then negotiate a minimum cap for thedepository institution and split the minimum in its discretion betweenor among different aggregated accounts associated with the differentprograms at the same depository institution, and may alter that split ona real time basis in its discretion. The minimum deposit cap can be setto zero or greater. Accordingly, when allocating deposits to thedepository institutions for a given financial entity and/or program, theallocation process will attempt to satisfy the minimum deposit capassociated with the aggregated account for that financial entity and/orprogram at the destination depository institution. In an embodiment, theallocation process may allocate withdrawal of funds first fromaggregated accounts held in destination depository institutions for thatfinancial entity and/or program that have balances above theirrespective minimum deposit caps before it allocates withdrawal of fundsfrom aggregated accounts held in destination depository institutions forthat financial entity and/or program that are at or below theirrespective minimum deposit caps. Note that the Min Cap can be set usinga variety of factors. As noted, the Min Cap at a depository institutionmay be associated with a single aggregated account of a financial entityand/or program. Thus, there may be a different respective Min Capassociated with each different financial entity with an aggregatedaccount registered at that depository institution. In an alternativeembodiment, as noted above, the Min Cap may be negotiated with amanagement institution 10 and may cover the aggregate of all of thefunds managed by that management institution in aggregated accounts inthat depository institution. Thus, the management institution wouldattempt to ensure that a certain stable minimum amount of total assetsmanaged by the management institution were maintained at that depositoryinstitution

“Max Cap” is the maximum deposit amount that is to be maintained eitherin a given aggregated account at a destination depository institution,or the maximum deposit amount to be maintained over a plurality ofaggregated accounts, each associated with a different financial entityand/or program, at a destination depository institution. The system willallocate deposits to respective aggregated accounts held in destinationdepository institutions associated with the given financial entityand/or program that are below their respective Max Caps in an order thatis set by rule for deposits. As with the Min Cap, the Max Cap may be oneassociated with a single aggregated account of a single financialentity. Alternatively, the Max Cap may be the aggregate dollar amountthe management institution 10 has approved for the particular depositoryinstitution to be split among a plurality of the aggregated accounts atthat depository institution, or a lesser amount set by that depositoryinstitution for all of the accounts managed by the managementinstitution 10. In one embodiment, the Max Cap is set based on a creditpolicy. In this embodiment, before a depository institution is added tothe deposit system of the present invention, the management institution10 performs a credit check and determines if the depository institutionmeets predetermined credit standards required by the financial entityassociated with that aggregated account, or alternatively required by amanagement institution credit policy. The management institution 10 thenapproves each depository institution for a specific aggregate depositamount that is either associated with a given aggregated account at thedepository institution, or with the overall depository institution. Thisamount may be changed over time as circumstances require. The Max Capthus functions in this embodiment as a safety cap to ensure that thesystem does not allocate a deposit to an aggregated account at thedepository institution that will push it over the Max Cap. As notedabove, at times the depository institution will request a lower depositmax cap.

“Absolute Cap” is the maximum deposit amount approved for either theaggregated account held in a destination depository institution or forthe depository institution itself. The absolute cap can be greater thanor equal to the Max Cap. In situations where some or all of theaggregated accounts are at or over their respective Max Caps, the systemmay allocate deposits to aggregated accounts or to depositoryinstitutions above their respective Max Caps up to an Absolute Cap thatshould not be exceeded.

“Min=Max” if the min and max cap are equal, the aggregated account heldin the destination depository institution is preferably bypassed by theallocation process once deposits from a given financial entity and/orprogram reach the level of the Min=Max Cap. It is intended that suchaggregated account held in the depository institution, after its balanceof assets is at or above it Min Cap, shall have virtually no activity,other than the posting of interest at month end. The allocation processis designed to access the funds in these depository institutions only ifthere is no other option. The allocation process automatically allowsfor minimal increases in the Max Caps at month end to allow for interestposting. Note that other methods of preventing transfers to or from anaggregated account or a depository institution are further describedlater.

The management institution 10 may be designed to run two allocationprocesses: a depository institution allocation process, which allocatesfunds between/among the depository institutions DI1-DIq, and a clientaccount balance allocation (to be discussed later). Referring to thedepository institution allocation process, as explained in furtherdetail below, this allocation process may serve one or more of severalpurposes, such as, for example, to maintain substantially stable depositfunds at a depository institution by a financial entity or a managementinstitution by limiting deposit/withdrawal activity, to ensure thatactivity at the depository institutions DI1-DIq complies with federalregulations such as FDIC regulations, to ensure compliance with a creditpolicy, and to insure compliance with specific rules set by the client,the Financial entity, or the branch, to name a few.

With reference to the Min=Max cap parameter, the inventors haverecognized that depository institutions are more willing to accept largedeposits if the management institution can guarantee substantialstability, with limited activity. If the account has substantialactivity it becomes a burden to the depository institution. Minimizationof deposit and withdrawal activity also makes reconciliation easier forthe given financial entity maintaining funds in that depositoryinstitution, since it may be less costly if the financial entity and/orthe management institution 10 is not sending wires every day to everydepository institution. Additionally, deposit/withdrawal minimizationreduces the people resources needed to administer the various program.

In one embodiment, the depository institution allocation process throughthe use of the Min Cap, may try to bring the balance in each aggregatedaccount at the depository institutions up to at least a minimum depositcap. This minimum deposit cap may be negotiated based on a variety ofbusiness and banking concerns such as a minimum level of stable assetsmaintained by a financial entity or program or the managementinstitution at the depository institution, or the depositoryinstitutions overall need for deposits to cover loan activity, andminimization of deposit/withdrawal activity, as discussed above.

As noted above, a maximum deposit cap, Max Cap, may also be set for theparticular depository institution for various reasons includingmaintaining a credit policy, and controlling a level of activity in atransaction account.

The depository institution allocation process may be set to minimizeactivity for that aggregated account after the balance in the accounthas reached the Min Cap, via by-passing withdrawals or credits to thatdepository institution account by setting the minimum deposit cap equalto the maximum deposit cap. Alternatively, other methods of flaggingaccounts that should remain unchanged as a result of net daily activitycan be used as the equivalent of setting the maximum deposit and theminimum deposit to be equal. For example, a flagging method may comprisedetermining if a flag such as a data field has been set in the system ora database indicates whether to avoid withdrawing funds from ordepositing funds to the different one of the aggregated accounts, or ifa rule is currently in operation to avoid withdrawing funds from ordepositing funds to the different one of the aggregated accounts. In oneembodiment, this data field or rule may be associated with a given day,set of days, week, etc., and may indicate that no withdrawals are totake place for the designated periods. Alternatively, such a flag orrule may indicate that no deposit or withdrawal activity is to takeplace with respect to the particular aggregated account. Note that inone embodiment, deposit and/or withdrawal activity may be directed to oraway from a given aggregated account using minimum caps, maximum caps,flags, rules, and various combinations thereof.

In some instances, the allocation process may not be able to by-pass aparticular depository institution for withdrawals, such as when aby-pass is in conflict with set parameters or a client has a withdrawalthat is only attached to the particular depository institution. In thiscase, the depository institution allocation process will allow thewithdrawal but attempt to replace the dollar amount withdrawn with anoffsetting credit from one or more other clients of that financialentity with funds in an aggregated account at a different depositoryinstitution associated with that financial entity, and/or in someinstances simply with funds from another depository institution managedby the management institution 10. Accordingly, the process reallocatesfunds from one or more aggregated accounts attached to other depositoryinstitutions. Thus, the net activity for the depository institution inwhich the withdrawal should have been by-passed is at or about zero.

The second allocation process is the client account balance allocation.In this allocation, the client account balances arereshuffled/reallocated at some convenient time, to match the allocationto each depository institution determined above. Thus, individual clientbalances for clients of a given financial entity FE1 or itscorrespondents can be shuffled/allocated to aggregated accounts indifferent depository institutions. In one embodiment, the managementinstitution 10 reshuffles by following individual client accountbusiness rules, and financial entity and correspondent and branchbusiness rules (examples will provided below), and then the remainingclient accounts are reshuffled/allocated beginning with the clientaccount of the financial entity or correspondent (in the case ofco-mingled accounts) with the highest balance and progressing to theclient account with the lowest balance. The reallocation alternativelycan be performed from the lowest account balance to the highest accountbalance, or in any other convenient sequence. In the example, thedepository institution DI1 with its aggregated account having its MinCap=and Max Cap would not be debited for the $50,000 client withdrawal.Rather, the client account balances would be reshuffled among depositoryinstitutions to allocate sufficient balances from other depositoryinstitutions associated with financial entity FE1 either directly orthrough a correspondent relationship to ensure that the aggregate amounton deposit remains unchanged at the depository institution DI1.

The transferring of funds from the financial entity to one or moredepository institutions may be performed, in one embodiment, by way ofan intermediary bank 30 which may or may not be associated with themanagement institution 10. This movement/distribution of the funds maybe accomplished before or after the reshuffling of client accountbalances process. In one embodiment, a deposit of the funds to thedepository institutions may be accomplished by sending, by anyconvenient mode of communication, e.g., wire, email, telephone, mail,etc., an order to the intermediary bank 30 to transfer funds to selecteddestination depository institutions DI associated with the financialentity and/or program in the amounts prescribed. For debits, in oneembodiment, a wire or other convenient mode of communication may be sentby the management institution 10 or a self clearing financial entitydepending on whether or not the accounts are segregated, to a messengerservice to have a messenger deliver a transfer form sent to thedepository institution to cause it to withdraw funds. In this manner, adebit of funds is made from selected depository institutions associatedwith financial entity in amounts prescribed. Other known or futuredeveloped techniques for delivering funds may also be used.

In an embodiment of the invention, the allocation process may also beused to ensure that the depository institutions DI1-DIq comply with FDICregulations. For example, federal regulations currently prohibit morethan six withdrawals from interest bearing demand accounts during amonthly period using certain withdrawal techniques.

Referring to FIG. 5, block 500 represents an operation of maintaining orhaving maintained or accessing, by one or more computers, an electronicdatabase, on one or more computer readable media, comprising: (i)aggregated deposit account information for one or more of governmentbacked-insured and interest-bearing aggregated deposit accounts, held inone or more depository institutions, comprising at least a firstdepository institution, each of the one or more aggregated depositaccounts holding funds of more than one client; and (ii) client accountinformation for a plurality of client accounts for a plurality ofclients whose funds had been accepted for deposit in the names of therespective clients at the first depository institution. Note that in oneembodiment, the government backed insurance is from the Federal DepositInsurance Corporation.

Block 510 represents an operation of obtaining a plurality of netcredit/debit amounts during a month period, with each respective netcredit/debit amount comprising a sum of credits to and/or debits withrespect to multiple of the client accounts for a respective sub-periodof the month. This element may be performed by receiving or accessingdata for net credit/debit amounts comprising a sum of credits to and/ordebits from multiple of the client accounts. Alternatively, this elementmay be performed by obtaining deposit and/or withdrawal sweeps, orindividual item data or net data for individual client accounts, andthen calculating a net credit/debit amount. Data may be received oraccessed electronically, or may be received by telephone, or byfacsimile, and then keyed into the one or more databases of the system.The method by which this data is obtained is not limiting on theinvention.

Block 520 represents an operation of generating data fordepositing/transferring funds to or withdrawing/transferring funds fromat least one of the one or more aggregated deposit accounts multipletimes in a month period, based at least in part on one or more of thenet credit/debit amounts for one or more sub-periods of time. The datagenerating step comprises generating data for instructions for making awithdrawal/transfer from funds held at one of the one or more depositoryinstitutions more than six (6) times during the month period, comprisingpresenting instructions to the respective one depository institutionusing one or more of the methods: in person, or by mail, or bymessenger, or by telephone and distributed by mail, or by automatedteller machine, or a combination thereof for substantially all of thewithdrawals/transfers except for a set of at least one but not more thansix withdrawals within the month period, and presenting instructions tothe respective one depository institution using a method that countsagainst a 6 withdrawal limit for this set of the withdrawals during themonth period. In one embodiment, the set of at least one but not morethan six withdrawals within the month period is from the last sixbusiness days of the month period, and instructions are presented to therespective one depository institution using a method that counts againsta 6 withdrawal limit for this set of the withdrawals during the last sixbusiness days of the month period. In one embodiment, the instructionsfor withdrawal/transfer that count against a 6 withdrawal limit arepresented in the last 5 business days of the month and are presented byelectronic communication. In another embodiment, the presentation of theinstructions is made using a method that counts against the 6 withdrawallimit only on a selected day of the week, e.g., only on Mondays, or onlyon Fridays. In another embodiment, the presentation of the instructionsis made using a method that counts against the 6 withdrawal limit onlyin a selected week of the month, e.g., the first week of the month. Inanother embodiment, the presentation of the instructions made using amethod that counts against the 6 withdrawal limit is intermingled duringthe month. In one embodiment, the presentation of the instruction thatcounts against the 6 withdrawal limit is by wire. As noted, the 6withdrawal limit referenced is set by U.S. federal banking regulation.

Block 530 represents an operation of updating or having updated, by theone or more computers, the electronic database to reflect changes inclient funds held in the one or more aggregated deposit accounts.

In one embodiment, the one or more depository institutions holding oneor more aggregated deposit accounts comprises only the first depositoryinstitution. This embodiment allows a depository institution to maintainfunds of its customers on its balance sheet, provide government backedinsurance, and permit unlimited number of withdrawals in a month. In afurther embodiment, the one or more depository institutions comprise aplurality of depository institutions.

In a further embodiment, the one or more depository institutionscomprise a plurality of depository institutions, and the generating datafor instructions to deposit/transfer funds to or withdraw/transfer fundsfrom the one or more aggregated deposit accounts based at least in parton one or more of the net credit/debit amounts further comprises theoperation of transferring funds of a respective client only to one ormore depository institutions which hold less than a specified amount ofthe funds of the respective client. For example, the specified amountmay be equal to or less than an FDIC insurance limit for an individualaccount.

As noted, these embodiments may be implemented with a variety ofdifferent source institutions. However, in one embodiment, there are aplurality of depository institutions holding aggregated depositaccounts, and the method steps are performed by a self-clearing brokerdealer, and wherein the accessing client account data comprisesreceiving deposit and/or withdrawal sweep data from one or more otherbroker dealers, with the deposit and/or withdrawal sweep data comprisingdeposit and/or withdrawal data for the respective clients having clientaccounts with the one or more broker dealers.

As noted, these embodiments may be implemented with a variety ofdifferent source institutions. However, in one embodiment, aself-clearing broker dealer may perform the steps of maintaining theplurality of government backed-insured and interest-bearing aggregatedaccounts in the plurality of depository institutions. In at least oneembodiment, at least one of the aggregated accounts at one of thedepository institutions holds funds of multiple of the broker dealers.The self-clearing broker dealer may also perform, by the one or morecomputers, an electronic accounting function on a substantially periodicbasis based on client account data associated with the respective brokerdealers, wherein the electronic accounting function is performed for theclient accounts of the associated broker dealer based on the one or moreparameters associated with the respective broker dealer or therespective customer. Examples of such parameters have been previouslydescribed.

Referring to FIG. 6, an implementation of a further embodiment of theinvention is disclosed. Block 600 comprises an operation of maintainingor having maintained or accessing, by one or more computers, one or moreelectronic databases, stored on one or more computer-readable media,comprising: (i) aggregated deposit account information for a pluralityof respective government-backed insured and interest-bearing aggregateddeposit accounts held in a plurality of depository institutionsparticipating in a program, with the aggregated deposit accountsproviding non-penalized liquidity for the funds held therein, each ofthe one or more aggregated deposit accounts holding funds of more thanone client; and (ii) client account information for a plurality ofclient accounts, the client account information for a respective one ofthe client accounts comprising a balance of client account funds held ineach of one or more of the aggregated deposit accounts holding funds ofthe respective client account.

Block 610 comprises an operation of accessing client account datacomprising changes to client account funds sourced to the program from aplurality of source financial entities and held or to be held in thedepository institutions in aggregated accounts held therein. In oneembodiment, this data may comprise sweep data, and/or data forindividual transactions or nets thereof, from source financial entitiessuch as banks, credit unions, other types of depository institutions,registered investment advisors, broker dealers, asset managers, trustcompanies, retirement programs, other financial entities orintermediaries, to name a few.

The accessing operation may be performed by receiving or accessing datafor net credit/debit amounts comprising a sum of credits to and/ordebits from multiple of the client accounts. Alternatively, this elementmay be performed by obtaining deposit and/or withdrawal sweeps, and/orindividual item data or net data for individual client accounts, andthen calculating a net credit/debit amount. Data may be received oraccessed electronically, or by telephone, or by facsimile, and thenkeyed into the one or more databases of the system. The method by whichthis data is obtained is not limiting on the invention.

One or more intermediary institutions may be used to facilitate themovement of funds between the one or more source financial entities andthe depository institution(s) and/or to perform various recordkeepingfunctions. Such intermediaries may perform record keeping and/or fundtransfer functions, and may include a bank or clearance bank throughwhich fund transfers may be facilitated, a clearing firm, anadministrator that performs recordkeeping functions and/or provides datato facilitate fund transfers, and/or other entities that perform fundtransfer or recordkeeping functions. Note that multiple entities mayalso fulfill a single function or roll.

As noted above, in some deposit systems, one entity may play the role ofone or more of the above. For example, a source financial entity, suchas a bank, may also be a depository institution. Similarly, a sourcefinancial entity, like a broker-dealer, or a bank, may be affiliatedwith one or more of the depository institutions.

The present invention may be used in the context of these or other fundmovement systems.

Block 620 comprises an operation of allocating, by the one or morecomputers, fund amounts to the depository institutions to be held in theaggregated deposit accounts therein based at least in part on the clientaccount data for the client account funds and one or more rules. Notethat a variety of rules may be applied in allocating the funds among thefirst plurality of depository institutions. For example, one rulecomprises allocating funds to respective depository institutions so thatfunds held in the one or more aggregated deposit accounts in therespective depository institution do not exceed a maximum cap set forthe respective depository institution, and/or to ensure that funds heldin the one or more aggregated deposit accounts in a respectivedepository institution do not go below a minimum cap. Another rule maybe based on allocating funds based on a depository institution stabilityrating. Another rule may allocate in order to minimize fund transfersinto and/or out of the one or more aggregated deposit accounts held inthe respective depository institution for a period of time. Another rulemay allocate funds based on obtaining or retaining government backedinsurance, e.g., allocating funds of a respective client account only todepository institutions which hold less than a specified amount of thefunds of the respective client account. Another rule may be to allocatefunds to a respective one of the depository institutions, based at leastin part on whether the one depository institution has sourced funds tothe program which are held in one or more other of the depositoryinstitutions. Another rule may be to allocate funds to a respective oneof the depository institutions, based at least in part, on an amount offunds the one depository institution has sourced funds to the programwhich are held in one or more other of the depository institutions.

Block 630 comprises an operation of generating data fordepositing/transferring funds to or withdrawing/transferring funds fromat least one of the aggregated deposit accounts multiple times in amonth period, based at least in part on the accessed client accountdata, the data generating step comprising generating data forinstructions for making a withdrawal/transfer from funds held at one ofthe depository institutions more than six (6) times during the monthperiod, comprising presenting instructions to the respective onedepository institution using one or more of the methods: in person, orby mail, or by messenger, or by telephone and distributed by mail, or byautomated teller machine, or a combination thereof for substantially allof the withdrawals/transfers except for a set of at least one but notmore than six withdrawals within the month period, and presentinginstructions to the respective one depository institution using a methodthat counts against a 6 withdrawal limit for this set of the withdrawalsduring the month period. Any of the embodiments disclosed previously forelement 530 may be implemented here. For example, in one embodiment, theset of at least one but not more than six withdrawals within the monthperiod may be from the last six business days of the month period, andinstructions may be presented to the respective one depositoryinstitution using a method that counts against a 6 withdrawal limit forthis set of the withdrawals during the last six business days of themonth period. In one embodiment, the instructions forwithdrawal/transfer that count against a 6 withdrawal limit arepresented in the last 5 business days of the month and are presented byelectronic communication, such as by wire. For example, a last 6withdrawals, or a last 5 withdrawals, or a last 4 withdrawals, etc., maybe presented to the depository institution by wire, or other electroniccommunication method during this period.

Block 640 comprises an operation of updating or having updated, by theone or more computers, the one or more electronic databases to reflectchanges in client account funds held in the aggregated deposit accounts.

As noted previously, the government backed insurance may be from theFederal Deposit Corporation Insurance. These embodiments may beimplemented with a variety of different source institutions. However, inone embodiment, the method steps may be performed by a self-clearingbroker dealer, and the accessing client account data comprises receivingdeposit and/or withdrawal sweep data from one or more other brokerdealers, with the deposit and/or withdrawal sweep data comprisingdeposit and/or withdrawal data for the respective clients having clientaccounts, which clients are associated with and are also customers ofthe one or more broker dealers. In one embodiment, the self-clearingbroker dealer may also perform the steps of maintaining the plurality ofgovernment backed-insured and interest-bearing aggregated accounts inthe depository institutions. In one embodiment, at least one of theaggregated accounts at one of the depository institutions may hold fundsof multiple of the broker dealers. The self clearing broker dealer mayalso perform, by the one or more computers, an electronic accountingfunction on a substantially periodic basis based on client account dataassociated with the respective broker dealers, wherein the electronicaccounting function may be performed for the client accounts of theassociated broker dealer based on the one or more parameters associatedwith the respective broker dealer or the respective customer.

By way of example, one of the accounting parameters may comprise a typeof rate to be paid one or more client accounts associated in the one ormore databases with the broker dealer. In another embodiment, one of theaccounting parameters may comprise a tier of a rate chart to be paid onfunds of client accounts associated with the broker dealer based on abroker dealer rate parameter. In another embodiment, one of theaccounting parameters may comprise one or more levels of FDIC insuranceassociated with different client accounts of the respective brokerdealer. In another embodiment, one of the accounting parameters maycomprise one or more depository institutions that are associated withthe client accounts associated with the respective broker dealer forholding funds of those client accounts or are prohibited from holdingfunds of those client accounts. In another embodiment, one of theaccounting parameters may comprise one or more of the depositoryinstitutions that are associated with only a subset of the brokerdealers for holding funds of client accounts associated with only thesubset of the broker dealers or are prohibited from holding funds of thesubset of the broker dealers. In another embodiment, one of theaccounting parameters may comprise a preferred method for customerinitiated/late day transactions.

In a further embodiment, an operation may be performed of replacing atleast a portion of money withdrawn of one of the broker dealers from oneof the depository institutions by depositing money from another of thebroker dealers into the one depository institution.

In a further embodiment, the self clearing broker dealer may maintain anaccounting electronic database, on one or more computers, containinginformation on one or more accounting parameters to be applied whenperforming accounting functions relating to funds of a plurality of theclient accounts of a plurality of the broker dealers.

In a further embodiment, an operation is performed of allocating, usingthe one or more computers, fund amounts of client accounts among theaggregated deposit accounts, to substantially match the respectiveamounts allocated to the aggregated deposit accounts based at least inpart on the client account data for the client account funds and one ormore rules.

In a yet further embodiment, a problem has been discovered whenproviding FDIC insurance for large single accounts by allocating fundsacross multiple program banks. In current implementations separateaggregated accounts are set up for each different broker dealer at aplurality of the program banks. But, many program banks are notinterested in opening or maintaining such an aggregated account wherethe balance is less then some amount, e.g., $1-5 million. Part of thereason for this reluctance on the part of the program banks is theexpense involved in maintaining the aggregated account for such a smallamount coupled with attendant accounting issues. The accountingprocessing necessary for a broker dealer BD_(i) having multiplecustomers is cumbersome and resource intensive. Another reason for thisreluctance is the instability in the account balance that seems to flowfrom the size of the broker dealer BD_(i). Note that this issue isparticularly acute for self clearing broker dealers with a limitedclientele with one or a few large customer accounts of, for example,$1,000,000. Insuring $1,000,000 with FDIC insurance would require aminimum of ten program banks, each holding the current FDIC limit forinsurance from the large customer account. But a self clearing brokerdealer with a limited clientele would not have enough funds from otherof its customers to disperse among the ten program banks to make itprofitable for the ten banks to service their respective programaccounts. Also, such small balances tend to be less stable due to fundtransfers of the broker dealer customers, e.g., it is difficult tomaintain a stable level of assets at the bank. When this problem offinding FDIC insured banks to operate as program banks for such a smallself clearing broker dealer is coupled with the accounting function nowrequired for self clearing broker dealers, the situation for such smallself clearing broker dealers becomes in many cases, untenable.Accordingly, it may be difficult to find program banks that will open aseparate aggregated account for $1-5 million for a small broker dealerBD_(i). Moreover, if a program bank does agree to maintain an aggregatedaccount for such a small amount, the rate of interest it will agree topay may be less than other significantly larger accounts.

FIG. 1 illustrates one embodiment of the invention wherein a selfclearing broker dealer 100 provides an insured deposit program thatcauses sweep funds received at one or more intermediary banks 110associated with the self clearing broker dealer, which funds representdeposits and withdrawals for customers of multiple other broker dealersBD₁-BD_(n), to be allocated to and invested in aggregated accounts in aplurality of program banks 130-140 to thereby obtain FDIC insurance forsingle large accounts of over the current FDIC limit for insurance.Additionally, accounting functions are provided relating to deposits andwithdrawals for the individual customer accounts of the broker dealersBD_(1-n) and clearing reconciliation calculations are performed for thefund transfers. Note that in some embodiments, the intermediary bank 110may function not only as the intermediary, but also as a program bank.

FIG. 1 illustrates the overall system and process for one embodiment.Each of lines 118 _(1-n) illustrates the communication of one or moresweep files comprising credit and debit transactions of customersassociated with the respective broker dealers BD_(1-n) to the selfclearing broker dealer 100. One or more settlement communication occurbetween a given broker dealer BD_(i) and the self clearing broker dealer100 to determine a net of aggregated credit and debit transactions ofthe customers of that broker dealer BD_(i). The lines 115 _(1-n) in onedirection represent fund transfers (typically by wire) from therespective broker dealers BD_(1-n) to the intermediary bank 110 in thesituation where the net of the customer credits and debits is determinedin the settlement to be a net credit. Lines 140 _(1-n) in one directionrepresent the path for the wiring or other means of depositing funds toone or more of the program banks 130-140 in the situation where thesettlement is a net credit. These lines 140 _(1-n) in the otherdirection also represent the path for the movement of withdrawn fundsfrom the program banks 130-140 to the control operating account at theintermediary bank 110, for dispersal to the appropriate broker dealerBD_(i) via the lines 115 _(1-n) in the case of a net withdrawal offunds. The lines 125 _(1-n) represent the communication between the selfclearing broker dealer 100 and the program banks 130-140 regarding thedeposit of funds to or the withdrawal of funds from one or more of theprogram banks. In the situation where the settlement has determined thatthere is a net debit to be satisfied, one or more different methods ofcommunication may be used to provide instructions for withdrawals (to bediscussed below). Details of the electronic system for implementing theself clearing broker dealer 100 will be discussed in relation to FIG. 3.

Referring now to FIG. 2, an embodiment of operations at the selfclearing broker dealer 100 are illustrated. Block 200 illustrates anoperation of maintaining or having maintained a separate account foreach of a plurality of customers of a plurality of broker dealersBD_(1-n).

Block 210 illustrates an operation of receiving by the self clearingbroker dealer 100 deposit and/or withdrawal sweep data representing oneor more cash sweep fund deposits and/or withdrawals associated with oneor more of the plurality of broker dealers BD_(1-n), with the depositsweep data and/or withdrawal sweep data comprising deposit andwithdrawal data for the respective customers of the one or more brokerdealers BD_(1-n). In one embodiment, this receiving operation would beperformed by one or more computers over a network.

In one embodiment, the sweep data comprises fund deposit data for cashdeposited by or for customers of the respective broker dealer BD_(i) andwithdrawals of funds to satisfy credit card or debit card or checking orother withdrawal activity of individual customers of the respectivebroker dealer BD_(i). The sweep file will typically comprise customeractivity from a single broker dealer BD_(i), but could comprise acomposite of deposit and withdrawal activity for customers of multiplebroker dealers BD_(1-n). In one embodiment, a settlement would bedetermined between the self clearing broker dealer 100 and the brokerdealer BD_(i) of a net amount comprising a net of the deposit andwithdrawal data from the customers of the broker dealer BD_(i). If thenet amount is a credit, then the amount of the credit is wired by thebroker dealer BD_(i) to a control operating account in the intermediarybank 110. This deposit sweep data indicates that a net of customerdeposits (excess cash in the customer accounts of the particular brokerdealer BD_(i)) and withdrawals for the particular broker dealer BD_(i)results in a net deposit. Alternatively, if the net amount determined inthe settlement is a debit, then such a net withdrawal would be satisfiedby withdrawal from one or more program banks (to be discussed below).

Block 220 illustrates an operation of maintaining a plurality ofFDIC-insured and interest-bearing aggregated accounts at a plurality ofdifferent program bank 130-140, with each program bank holding at leastone of the aggregated accounts, with at least one of the aggregatedaccounts at one of the program banks holding funds of a plurality ofbroker dealers BD_(1-n). Details of the aggregated accounts will beprovided below. In one embodiment, the aggregated account may comprise asingle money market deposit account (MMDA). Alternatively, there may betwo aggregated accounts, an MMDA paired with a demand deposit account(DDA). Alternatively, there may be a single aggregated NOW account forindividuals. Alternatively, there may be an aggregated NOW accountpaired with an aggregated MMDA. Alternatively, there may be anaggregated NOW account for individuals paired with an aggregated MMDAand a DDA for institutional customers paired with the same MMDA.

Block 230 illustrates an operation of maintaining and/or accessing byone or more computers an aggregated account electronic databasecontaining information on funds of each of a plurality of the customersheld in the plurality of aggregated deposit accounts.

Block 240 illustrates an operation of maintaining and/or accessing byone or more computers an accounting electronic database containinginformation on one or more accounting parameters to be applied whenperforming accounting functions relating to funds of the customers ofthe broker dealers BD_(1-n). Examples of such accounting parameters willbe discussed below.

Block 245 illustrates an operation of making, by one or more computers,information accessible over the Internet to respective customers of oneor more of the broker dealers on funds in the respective customer'saccount. In one embodiment, this information could be provided bypopulating a web page designated and/or customized for that customeralone, with data on the funds in the respective customer's account. Suchinformation could comprise a balance in the respective customer'saccount, and/or information identifying the one or more program banksholding funds of the respective customer. In one embodiment, the webpages, with one or more such pages customized for each customer, wouldbe provided on a Web server and made accessible by means of a customerbrowser, using ID and password controlled access. The information couldbe updated on the respective web page of the customer periodically, orupon customer access to his/her respective web page. The Web servercould further be configured to allow the respective customers to depositfunds to and/or withdraw funds from their respective customer accountsvia the Web access. In another embodiment, this information could beprovided by sending or making accessible, periodically or upon request,or upon access to the database, an email or other electroniccommunication to a customer electronic appliance, such as a computer, orPDA, or cell phone.

Block 250 illustrates an operation of determining by one or morecomputers, in the case of receiving in block 210 fund data resulting ina net credit, an allocation of funds to one or more of the plurality ofFDIC-insured and interest-bearing aggregated accounts at one or more ofthe aggregated accounts in the program banks 130-140, so that FDICinsurance coverage greater than the maximum FDIC insurance coverageallowed for a depositor for a single account is effectively provided forat least one customer, and for determining in the case of receiving inblock 210 sweep data resulting in a net debit, an allocation of one ormore withdrawals of funds from one or more program banks 130-140.

Block 260 illustrates an operation of providing by the self clearingbroker dealer 100, in the case of a net credit from the sweep data, atleast one instruction to the intermediary bank 110 for execution tocause funds to be deposited to one or more of the FDIC-insuredinterest-bearing aggregated accounts based on the allocation of fundsdetermined in block 250. Likewise, in the case of a net debit from thesweep data, providing by the self clearing broker dealer at least oneinstruction to at least one of the program banks 130-140 to withdrawfunds from its FDIC-insured interest-bearing aggregated account based onthe allocation of the withdrawal of funds determined in block 250.

Block 270 illustrates an operation of performing by the self clearingbroker dealer by one or more computers an electronic accounting functionon a substantially periodic basis based on deposit and withdrawal dataof the customers of the respective broker dealers BD_(1-n), andperforming interest calculations pertaining to funds of those customers,wherein the accounting function is performed for the customers of theassociated broker dealers BD_(i) based on the one or more parameters inthe electronic accounting database associated with respective brokerdealer BD_(i) and/or the customer. In one embodiment, the accountingfunction comprises a record keeping function, whereby the systemmaintains a history for each customer account, which history includestransactions, interest earned and the program banks 130-140 holdingfunds of the particular customer account. A determination is made as towhat customer account funds are held at which one or more program banks130-140. One or more reports for the program banks and the respectivebroker dealers BD_(1-n) may then be generated detailing which accountshave funds held at which program bank and in what amount.

In some embodiments the interest calculation can be fairly complex. Forexample, the system may track the aggregate interest distributed tocustomers of the broker dealers BD_(1-n) from each aggregate account ata program bank and the revenue or fee to be paid to the self clearingbroker dealer 100. For example, a given program bank may pay a fixedrate for funds for some predetermined period of time. However, the moneyin the aggregated account at the program bank may include funds fromseveral broker dealers BD aggregated together by the self clearingbroker dealer, with each broker dealer BD_(i) entitled to a differentrate of interest based on their respective agreement with the selfclearing broker dealer. For example, a tiered interest rate based on thetotal amount of funds provided to the self clearing broker dealer couldbe used. Each customer of the given broker dealer BD_(i) could likewisebe earning a different interest rate from the broker dealer BD_(i) basedon the customer's agreement with the given broker dealer BD_(i) (whichalso could be based on a tiered set of interest rates). Accordingly, thedifferent broker dealers BD_(1-n) could each be earning a differentinterest rate and the different customers of these different brokerdealers BD_(i) could each be earning a different interest rate for thesame aggregated account at a program bank. Thus, it is possible to haveone customer that is earning 3% and another customer earning 3.5% in thesame aggregated account at a program bank.

As noted, in one embodiment the program bank agrees to pay a specificrate on the overall MMDA aggregated account balance. The self clearingbroker dealer system may compute and then notify the program bank atmonth end what portion of the agreed upon rate is to be credited to theMMDA as interest and what portion should be paid to the self clearingbroker dealer as a fee or revenue. Note that in order to maintain thepass thru on FDIC insurance for the underlying depositors, fee income tothe broker dealer BD_(i) or agent on the account is paid separately bythe program bank.

Block 280 illustrates an operation of performing by the self clearingbroker dealer 100 or an affiliate of the self clearing broker dealer ora third party, by one or more computers, a substantially periodicclearing reconciliation for customer accounts and/or broker dealeraccounts and the aggregated accounts in the program banks. In oneembodiment, this reconciliation calculates electronically if amountsheld in one or more of the aggregated accounts in the plurality ofprogram banks 130-140 equals the amounts held in respective customeraccounts. Reconciliation is the process of ensuring that the aggregatebalance for customer and/or broker dealer accounts maintained in thedatabase and distributed to the program banks is equal to the aggregatebalance maintained at the program banks 130-140. Reconciliation can betaken down to various levels. For example, a reconciliation calculationprocess may be used to ensure that if a customer account has a balanceof $1 million in the program banks, that the sum of the balances listedin the database for that customer as held in the aggregated accountsamong the program banks also equals $1 million. Alternatively or inaddition, the system can also reconcile by individual broker dealerBD_(i), e.g., to ensure that the amount in the customer accounts forthat broker dealer BD_(i) distributed to the program banks equal the sumof the amounts associated with that broker dealer BD_(i) in theaggregated accounts at the various program banks. Alternatively or inaddition, a reconciliation may be performed for sweep data received andfunds transferred during a given period. The type of reconciliationcalculation is not limiting on the invention.

In a further embodiment, an operation may be performed of determining bythe self clearing broker dealer 100 on a substantially regular basisduring a portion of the day a net transaction comprising a net of thesweep data files received over a period of time from a plurality of thebroker dealers BD_(i). For example, a net transaction could becalculated at 10 am, 4 pm and 6 pm. The determining electronically theallocation operation of block 250 would then be calculated based on thenet of the sweep files received during this period of time.

In a further embodiment, an operation is performed of associating atleast one accounting parameter with each of a plurality of the customeraccounts and using that parameter in the electronic accounting operationof block 270.

In a further embodiment, an operation is performed of transferring bythe self clearing broker dealer 100 of funds to a reserve account if adiscrepancy, e.g., out of balance condition, is determined in thereconciliation operation of block 280.

In a further embodiment, the providing at least one instructionoperation of block 260 comprises providing by the self clearing brokerdealer 100 instructions to the intermediary bank 110 to cause funds tobe deposited to a plurality of the program banks so that each of theplurality of the program banks holds funds from a plurality of thebroker dealers BD.

In a further embodiment, the providing at least one instruction providedin the operation of block 260 requires use of a method of withdrawalthat allows an unlimited number of withdrawals per month from one ormore of the program banks 130-140 during a month while preserving aninsured and interest-bearing status of the aggregated deposit accountsin the one or more program banks.

In a further embodiment, the method of withdrawal operation with respectto one or more of the program banks is substantially performed only byone or more of the following methods: in person, or by mail, or bymessenger, or by telephone and distributed by mail, or by automatedteller machine, or a combination thereof so that the insured andinterest-bearing status of the aggregated deposit accounts is preserved.In a further embodiment, this restriction to one of the methods listedabove does not begin to operate until a threshold number of withdrawalshave been made from the aggregated account at the respective programbank. In a yet further embodiment, this restriction to one of themethods listed above for withdrawals made from the aggregated account atthe respective program bank is imposed for a substantial portion of amonth, and for the remainder of the month, e.g., a remaining 5 days,withdrawals are made by a method that counts against the 6 withdrawallimit, e.g., electronically, such as by wire.

In a further embodiment, the providing of at least one instructionoperation of block 260 requires that no more than a predetermined numberof withdrawals are made from any one aggregated account in a programbank during a predetermined period of time in order to preserve theinterest-bearing status of that program bank. In one embodiment, thepredetermined number is 6. Note that in U.S. Pat. No. 5,893,078 toPaulson, which is hereby incorporated by reference in its entirety,after 5 withdrawals from an account, the balance of the account istransferred to a demand deposit account.

In a further embodiment, the providing at least one instructionoperation of block 260 requires that after a predetermined number ofwithdrawals during a predetermined period of time are made from any oneaggregated account in a program bank, e.g., 5 in one month, then all ofthe funds in the account are withdrawn and transferred to anotherFDIC-insured interest-bearing aggregated account held at a differentprogram bank. By way of example, see U.S. Pat. No. 4,985,833 to Oncken,which is incorporated by reference herein in its entirety

In a further embodiment, the providing at least one instructionoperation of block 260 requires that no more than a predetermined numberof withdrawals are made from any one aggregated account in a programbank during a predetermined period of time in order to preserve theinterest-bearing status of that program bank. For example, in the casewhere the predetermined number is 6, then the six program banks may beused to ensure that at least one withdrawal may be made every day of amonth.

In a further embodiment, the one or more accounting parametersreferenced in block 240 comprise a type of rate to be paid one or morecustomers of the broker dealer BD_(i), which may change based on avariety of factors.

In a further embodiment, the one or more accounting parametersreferenced in block 240 comprise a tier of a rate chart to be paid onfunds of the broker dealer BD_(i) based on a broker dealer rateparameter.

In a further embodiment, the one or more accounting parametersreferenced in block 240 comprise one or more levels of FDIC insuranceassociated with different customers of the broker dealer BD_(i).

In a further embodiment, the one or more accounting parametersreferenced in block 240 comprise one or more program banks that areassociated with the customer of the broker dealer BD_(i) fortransferring funds of that customer, or are prohibited from receivingfunds of the customer. For example, one of the customers of a givenbroker dealer BD_(i) may have elected to not permit his/her funds to bedeposited in a given program bank because he/she may already have anaccount at that bank.

In a further embodiment, the one or more accounting parametersreferenced in block 240 comprise one or more program banks that areassociated with only a subset of the broker dealers BD_(i) for holdingfunds of the subset of the broker dealers, or are prohibited fromholding funds of the subset of the broker dealers.

In a further embodiment, the one or more accounting parametersreferenced in block 240 comprise a preferred method for customerinitiated late day transactions. For example, the preferred method maycomprise performing a late sweep file operation, where the brokerdealer's customers are using checks or a debit card issued by thatbroker dealer BD_(i) or it could comprise a cash performance accountthat might comprise cash management services such as providing selfclearing broker dealer checks, cards, ACH, and/or Automated Bill Pay.

In a further embodiment, an operation is provided of obtaining accountdata for each of the plurality of program banks relating to theirrespective FDIC-insured and interest-bearing aggregated deposit account,and using that data to perform the electronic accounting function.

In a further embodiment, an operation is provided of managing depositsand withdrawals from the plurality of program banks to ensure that aminimum amount of deposits is maintained in at least one of the programbanks. An embodiment of this feature is described in Ser. No. 11/767,827filed on Jun. 25, 2007, which is incorporated by reference herein.

In a further embodiment, an operation is provided of replacing at leasta portion of funds withdrawn of one of the broker dealers BD_(i) fromone of the program banks by depositing funds from another of the brokerdealers BD_(i) into the aggregated account held in that program bank.This operation is performed in some embodiments in order to maintain astable amount at the given program bank.

In a further embodiment, an operation is provided of managing thedeposits and withdrawals at the program banks 130-140 to ensure that arespective balance maintained at each of a plurality of the respectiveprogram banks is less than or equal to a cap related to assets at therespective program bank.

Among the network of program banks to which funds are to be allocated toobtain FDIC insurance over FDIC limit for one or more single accounts,at least one of those program banks holds aggregated funds of multiplebroker dealers BD_(i) in a single aggregated FDIC-insured interestbearing deposit account. In one embodiment, accounting functions andaccounting parameters for each of the broker dealers BD_(i) and/or theircustomers may be linked to the respective customer accounts. Forexample, a functionality based on broker dealer designated accountingparameters may be linked with the customer account. Thus, the brokerdealer BD_(i) or other party such as the self clearing broker dealer mayset one or more parameters such as the following:

-   -   The type of rate to be paid to broker dealer customers (for        example, tiered, not tiered);    -   The level of FDIC insurance based on a parameter;    -   Specify the program banks that are available to customers;    -   Specify that a given program bank may be assigned to all broker        dealers BD_(1-n) or may be assigned to only one broker dealer        BD_(i). (Example: a broker dealer BD_(i) may choose to send the        bulk of its customer funds to a sister company that is a bank        unless one of its customer's balance exceeds the current FDIC        limit for insurance);    -   Select a preferred method for customer initiated/late day        deposit or withdrawal transactions, for example, via sending a        late sweep file for situations where the broker dealer BD_(i)        has its own checks or debit cards, or for checks and debits        received by a processing bank in the case where the self        clearing broker dealer 100 has issued its own checks and debit        cards to these customers.

In one embodiment, a sweep interface is provided for insured deposits,which may include in addition to transaction files, one or more of abookkeeping file and/or acknowledgement file, position files that listthe program banks containing customer funds, name and address files foropening or changing accounts, tier/household files (interest and otherbenefits are determined by the balance of all or substantially all ofthe accounts of the household), bank deposit files and month end files.The sweep interface is not limited to the files listed above, but mayinclude other files.

Clearing Agreements—

In one embodiment, a broker dealer BD_(i) may have a limited clearingarrangement with the self clearing broker dealer 100 for the managementof their customers' cash balances. The broker dealer BD_(i) would sweepthe customer excess cash balances (either all of the cash balance, orsome amount exceeding a predetermined amount, for example) andwithdrawals to the control operating account in the intermediary bank110 that is registered in the name of the self clearing broker dealer orthe like. The self clearing broker dealer would then allocate customerbalances swept to the control operating account in the intermediary bank110 for deposit into various program banks 130-140. The broker dealerBD_(i) would have the option to continue to maintain all other clearingfunctions in this embodiment.

Intermediary Bank—

In one embodiment, all funds exchanged between the broker dealers BD,the self clearing broker dealer 100 and the program banks 130-140 wouldpass-though one control operating account at the intermediary bank 110registered as “[name of self clearing broker dealer or the like] asagent for the exclusive benefit of its deposit customers.” Note that inother embodiments more than one control operating account could beutilized and more than one intermediary bank could be utilized. Thus,the recitation in the claims of an intermediary bank is intended toencompass one or more such accounts and/or intermediary banks. Note thatthe intermediary bank may also, in some embodiments, be a program bank.Additionally, the intermediary bank, in some embodiments, may be a bankaffiliated with the broker dealer BD_(i).

Program Banks—

In one embodiment, each program bank 130-140 would include at least onemoney market deposit account (MMDA)-demand deposit account (DDA) pair,each registered as “[of self clearing broker dealer or the like] asagent for the exclusive benefit of its deposit customers.” The balancesfrom the customers of the participating broker dealers BD_(1-n) thatclear thru the self clearing broker dealer 100 are deposited to theaggregated accounts in the different program banks, wherein customerfunds from a plurality of broker dealers BD_(1-n) are deposited in thesame aggregated account in at least one of the program banks. Note thatone or more of the program banks may elect to use only an MMDA withoutpairing it with a DDA. Alternatively, one or more of the program banksmay use a Now account by itself for an individual customer, or pairedwith an MMDA. Alternatively, one or more of the program banks may use aNow account for individual customers paired with an MMDA, and a DDApaired with the same MMDA for institutional customers. Additionally, oneor more program banks, in some embodiments, may be affiliated with thebroker dealer BD_(i).

Self Clearing Broker Dealer Model

In one embodiment, the self clearing broker dealer offering FDIC sweepprograms would maintain minimum net capital and would not be exempt fromthe requirements of Rule 15c3-3 under the Securities Exchange Act of1934 pursuant to paragraph (k) thereof. The self-clearing broker dealerwould then enter into a limited clearing arrangement with other brokerdealers BD_(1-n) for the management of their customers' cash balances.The broker dealer BD_(i) would provide information concerning itscustomers' excess cash balances to the self clearing broker dealer 100.The self clearing broker dealer would send instructions to the brokerdealer as to how customer balances would be allocated and deposited intothe various program banks 130-140. The broker dealer would then sweepthe customer balances, upon receiving these instructions from the selfclearing broker dealer, directly to the intermediary bank. The brokerdealer BD_(i) would in this embodiment continue to maintain all otherclearing functions.

In one embodiment, the self clearing broker dealer may enter into one ormore agreements with the intermediary bank 110 and the program banks130-140 as may be required by applicable laws, regulations andguidelines. The DDA and MMDA in the respective program banks 130-140would be registered as “[Name of self clearing broker dealer or thelike] 100 as agent for the exclusive benefit of its deposit customersacting for itself and others,” to obtain pass-through FDIC insurance.

The self clearing broker dealer 100 would be the agent of record for theparticipating deposit customers of the various broker dealers BD. Theparticipating customers via the terms and conditions of their agreementwith their respective broker dealer BD_(i) and or the self clearingbroker dealer, would agree to appoint the self clearing broker dealer100 as their agent, thereby granting the self clearing broker dealer 100permission to move their funds between their customer account at theirrespective broker dealer BD_(1-n) the intermediary bank 110 and theprogram banks 130-140.

The self clearing broker dealer 100 is responsible for the dailyreconciliation calculation to ensure that its insured deposit sweepprogram is in balance. If necessary, the self clearing broker dealer 100could separately reconcile the accounts for each participating brokerdealer BD_(i).

The self clearing broker dealer 100 in this embodiment may establish asweep interface between itself and each participating broker dealerBD_(i). The self clearing broker dealer 100 would be responsible for themovement of funds of the broker dealers BD_(1-n) and would provideclearing services with respect to the participating program banks130-140. The self clearing broker dealer 100 may also offer additionalservices such as check writing, debit card, credit card, ACH processing,and/or line bill pay services, to name a few.

Each broker dealer BD_(i) would provide one or more daily sweep filesthat contains deposits and withdrawals. The self clearing broker dealer100 processes each sweep file and runs the allocation process on thesweep file by itself, or on a plurality of the sweep files, either atthat time, or on a periodic basis, such as every two hours, or at thebank cutoff time. The self clearing broker dealer 100 reviews the mostrecent allocation output and generates and provides instructions as tothe movement of funds between the broker dealers BD_(1-n), theintermediary bank 110 and the program banks 130-140. This process willbe discussed in more detail below.

In another version of the allocation program, small accounts (e.g., lessthan the current FDIC limit for insurance) are initially spread across asubstantial number of the program banks. See Ser. No. 12/025,402 filedon Feb. 4, 2008 for details of one embodiment of such small accountdistribution. In one embodiment, all or substantially all of the programbanks receive a portion of the small accounts. When a sweep file isreceived during the day, for each customer account debit or deposittransaction in the received sweep file, the system selects for theallocation of the transaction one or more program banks that have beenallocated or may be allocated funds for that particular customer accountbased on one or more rules. At the end of an AM sweep period, the systemsends instructions to the intermediary bank 110 and the program banks tomove the funds based on a net of the deposit and withdrawal allocationsto the respective program banks. The process in one embodiment does nottry to limit the number of program banks with fund wiring activity.Accordingly, in one embodiment the balances allocated to the differentprogram banks are not set based on a set of bank target balances, butrather can float between a maximum cap and a minimum cap for therespective program banks, based on deposit and debit transactionsallocated during the day, e.g., the system may allocate funds with aprogram bank up to the program bank's maximum cap and withdraw fundsdown to the program bank's minimum cap. If a program bank has a minimumand maximum cap that are set to be equal, the system in one embodimentwill not process a withdrawal or deposit against the program bank unlessthe system has no other option. After the bank cutoff time, the balancesat the respective program banks are fixed for the rest of the day. Note,however that the balance at the holdback bank can change based on PMsweep activity.

The system processes PM sweep files and CPA transactions (checks, debitcards, credit cards, ACH, to name a few) and posts the customer debitand credit transactions to the respective customer accounts. In oneembodiment, the system then re-shuffles/reallocates customer accountsamong the program banks based on a set of rules, but maintains therespective balances fixed at the program banks at the cutoff time. Anynet debit activity from a PM sweep file and/or the aggregate net debitfor CPA transactions (checks, debit cards, credit cards, ACH, to name afew) is satisfied from a holdback amount intended for that purpose. Anyfunds remaining in the control account in the intermediary bank aredeposited into the hold back bank. Note that not every customer accountthat had a debit or credit transaction in the PM sweep file or a CPAtransaction has funds in the hold back bank. Thus, a program bank thatwas initially allocated a customer account may be different from theprogram bank holding that account at the end of the day after are-shuffle process.

The self clearing broker dealer 100 is responsible for ensuring thatcustomer funds are properly deposited (in the case of a credit) from theintermediary bank 110 into one or more FDIC insured aggregated accountsin the program banks. The self clearing broker dealer is furtherresponsible for determining that the insured deposit sweep program is inbalance, and that all customer funds are properly accounted for asrequired by federal guidelines and Exchange Act Rule 15c3-3, ascurrently in effect or as may hereafter may be implemented under thesame or different rule numbers. The self clearing broker dealermonitors, calculates and reports net capital on a periodic basis, suchas a daily basis, per Exchange Act Rule 15c3-1. Note that Exchange ActRule 15c3-3 (aka: The Customer Protection Rule) applies to self-clearingbroker-dealers and requires a precise identification of customer fundson a daily basis.

Further note that in embodiments the self clearing broker dealer couldregister with the Securities Information Center as a “Direct Inquirer”for purposes of the Lost and Stolen Securities Program of the Securitiesand Exchange Commission. Also, the self clearing broker dealer maycomply with the possession and control requirements of Exchange Act Rule15c3-3, as currently in effect or as may hereafter may be implementedunder the same or different rule numbers. Books and records required tobe kept under federal regulations by self-clearing firms, include butare not limited to a pro form a stock record, Customer Reserve Formula,trial balance (with supports), and net capital computation as of thefirst day that self-clearing becomes effective.

Note that one or more of the following benefits may potentially beachieved:

-   -   It is in many cases difficult for small broker dealers, e.g.,        those having less than $100 million in deposits, to set up an        insured deposit sweep product because it is difficult to find        enough program banks that are willing to take a small balance        and pay a rate that is equivalent to the rate being paid on the        larger accounts to make the system viable. Thus, the smaller        broker dealer is at a competitive disadvantage. This difficulty        may be eliminated in selected embodiments of the present design.    -   A broker dealer BD_(i) has the option to sign a limited clearing        agreement with the self clearing broker dealer wherein the self        clearing broker dealer only clears for cash sweeps. Thus, the        self clearing broker dealer will clear for cash sweeps, but the        broker dealer BD_(i) can retain clearance responsibility for        other parts of its business, or use a different broker dealer to        clear a portion of its business.    -   Consolidating the movement of funds to include the activity for        all broker dealers BD_(1-n) reduces the number of money        movements. Due to a reduction in the number of transactions,        bank transaction fees are also reduced, as is the potential for        errors.    -   Monthly transaction charges for multiple control operating        accounts in one or more intermediary banks can be reduced in        selected embodiments.    -   Internal Costs may be reduced in some embodiments since        Operations will be tracking one set of bank accounts for        numerous broker dealers BD_(1-n) as opposed to several sets of        segregated accounts for each broker dealer BD_(i). Additionally,        one MMDA that contains the assets of several broker dealers        BD_(i) provides more stability for the respective program bank.        The self clearing broker dealer 100 can better control how the        assets are allocated though its modeling process and can shift        assets from other broker dealers BD_(i), as necessary to        maintain a stable level of assets at a program bank.    -   In this same respect, the self clearing broker dealer can better        manage the assets that are allocated to the different program        banks since it is not limited by the broker dealers BD_(i) that        can be attached to a particular program bank. Under the        segregated programs, an individual broker dealer BD_(i) must        have an agreement with the program bank before assets can be        transferred to that program bank.    -   The invention is less costly for the program banks in some        embodiments since they do not have to maintain an MMDA and DDA        pair for each broker dealer BD_(i).    -   The number of legal agreements required between broker dealers        and banks is reduced in some embodiments, as it is no longer        necessary to have a separate agreement between each broker        dealer BD_(i) and the intermediary bank and the program banks.        Only one agreement between the self clearing broker dealer 100        and the participating banks is needed. Thus, it is much easier        to add or change an intermediary bank or a program bank, and        legal department agreement negotiation is significantly reduced.        Likewise, the administrator in some embodiments will no longer        have to obtain a separate legal opinion for each new broker        dealer BD_(i) that signs up for an insured deposit sweep        program.    -   The self clearing broker dealer is the self-clearing entity for        the customer cash balances; therefore the self clearing broker        dealer is the party responsible for complying with the federal        guidelines. The broker dealers BD_(1-n) that obtain clearing        services thru the self clearing broker dealer can take advantage        of the bank sweep program that is already setup. The broker        dealer BD_(i) is able to specify key attributes to meet the        needs of its particular broker dealer firm. (e.g., FDIC        Insurance, rate paid, choice of program banks, to name a few.)    -   The broker dealer BD_(i) can experiment with a bank sweep        product without being required to commit extensive resources.        The product could be offered to a limited group of clients in a        specific region or test market or used to recruit        representatives from a major wire house whose customers are        using a bank sweep product. It is as simple as adding the        insured bank product to its choice of sweep products. The self        clearing broker dealer adds the broker dealer BD_(i) to its        system with agreed upon attributes or parameters.    -   Prior to the present invention, a broker dealer BD_(i) that        wished to be self clearing only had the option of setting up a        custom product, which required an extensive amount of work on        the part of the broker dealer BD_(i) and its chosen third party        administrator.

Each broker dealer BD_(i) in the program benefits from the participationof the other broker dealers BD_(i). The self clearing broker dealer cannegotiate better rates with program banks when it is dealing with largerpools of assets. Specifically, the program bank knows that the selfclearing broker dealer can ensure that a certain percentage of theassets will remain stable. A bank may be willing to pay more for assetsthat have little or no volatility. Accordingly, the broker dealersBD_(i) are not affected by the program bank's business needs. Incontrast, for a custom self clearing program of an individual brokerdealer, if a bank decides that it no longer needs the deposits, forexample due to excessive volatility, the custom broker dealer may beforced to scramble to find a replacement bank willing to take theassets. In a large program with numerous program banks this typicallywould not happen, or if it did, the remaining program banks in thesystem can absorb the deposits of the program bank that decided towithdraw from the program.

First Example Embodiment Self Clearing Broker Dealer Work Flow DailyProcessing

-   -   The accounts opened at the intermediary bank 110 and the program        banks 130-140 are registered as “The self clearing broker dealer        100 as Agent for the exclusive benefit of its deposit customers        acting for themselves and others.”    -   All funds flow thru one or a selected set of control operating        accounts in this embodiment.    -   Customer balances of at least some of the participating broker        dealers BD_(1-n) will be deposited in the same program bank        accounts registered as “The Self Clearing Broker Dealer as Agent        for exclusive benefit of its deposit customers acting for        themselves and others.”    -   The Broker Dealers BD_(1-n) set the interest rate paid to their        respective customers.    -   Broker Dealers BD_(1-n) may provide a household tier file for        their customers    -   Broker Dealer's customers may utilize the self clearing broker        dealer's own Cash Performance Account—which may include cash        management services (CPA) provided by the self clearing broker        dealer comprising checks, debit cards, credit cards, ACH, and/or        Automated Bill Pay, to name a few.    -   Broker Dealer BD_(i) may provide both an AM sweep transaction        file and a PM sweep transaction file.        I. Sweep File—AM (Received Before the Bank Cutoff Time)        Processing Example

A broker dealer BD_(i) provides an AM sweep transaction file to the selfclearing broker dealer 100. A settlement is reached between the brokerdealer BD_(i) and the self clearing broker dealer as to an amount to becredited or withdrawn. If the net activity is determined in thesettlement to be a credit, then

-   -   Broker dealer BD_(i) wires funds to the intermediary bank 110 to        be subsequently dispersed to the program banks by the self        clearing broker dealer 100.    -   Then, at that time or at a later time, the self clearing broker        dealer runs an allocation process based on that sweep file        alone, or on a net of a plurality of sweep files, and generates        and provides bank instructions to the intermediary bank to move        funds to one or more of the program banks.    -   In one embodiment the net credit is applied to the program banks        based on a set of rules. The customer accounts are re-allocated        to fit into the updated program bank balances. In one        embodiment, the objective is to limit the activity in the        program banks while providing FDIC insurance for the customer        accounts.    -   In another embodiment, the allocation process selects a program        bank to credit for each transaction based on a set of rules.        Although the net activity for a sweep file or a group of sweep        files is a credit or a debit, the actual bank movements could        comprise deposits to one or more program banks and withdrawals        from one or more program banks. The net activity for all program        banks would be equal to the net activity for the sweep files        processed.

If the net activity in the AM sweep transaction file is determined inthe settlement to be a debit, then

-   -   The self clearing broker dealer 100 runs the allocation process        at that time or at a subsequent time based on that sweep file        alone, or on a net of a plurality of sweep files, and generates        and provides bank instructions to one or more of the program        banks to withdraw funds. Funds are then wired by one or more        program banks to the intermediary bank 110. The self clearing        broker dealer 100 instructs the intermediary bank 110 to wire        the funds received from the program banks to the respective        broker dealer(s) BD_(i).    -   Just like the net credit, in one embodiment the net debit is        applied to the program banks based on a set of rules. The        customer accounts are re-allocated to fit into the updated        program bank balances. The objective in this process may also be        to limit the activity in the program banks while providing FDIC        insurance for the customer accounts.    -   Just like for the net debit, in another embodiment the        allocation process selects a program bank to debit for each        transaction based on a set of rules. Although the net activity        for a sweep file or a group of sweep files is a debit, the        actual bank movements could comprise deposits to one or more        program banks and withdrawals from one or more program banks.        The net activity for all program banks would be equal to the net        activity for the sweep files processed.

Prepaid Interest

-   -   The AM sweep file may contain full liquidations that require the        withdrawal of both principle and interest. The program banks do        not prepay interest in mid month. In this embodiment, the self        clearing broker dealer 100 would prepay the interest at the time        of the full liquidation. At month end, the self clearing broker        dealer 100 would reimburse itself for the interest that was        prepaid.    -   In another embodiment the broker dealer prepays the interest for        his clients full liquidations. At month end the self clearing        broker dealer would reimburse the broker dealer for the interest        that was prepaid.    -   In another embodiment interest is not prepaid. Customers cannot        withdraw the interest earned on their account until it is posted        at month end.        II. Modeling Process for One Embodiment

In one embodiment, a modeling process determines minimum and maximumcaps for the different program banks and is run after all the AM(pre-cutoff time) sweep files have been processed. The self clearingbroker dealer 100 makes any necessary adjustments to the program bankcaps. By way of example, this modeling process may be based on suchparameters as total program bank assets and the assets of the aggregatedaccount at that program bank. The modeling process also determineswhether or not the system needs to add one or more new program banks. Inone embodiment, each such program bank is assigned a maximum dollaramount that the system is willing to deposit up to. When a program bankhas reached this maximum dollar balance, the modeling process may placea hold on any additional funds being deposited with that program bank.The modeling process may also be used to determine how many banks (atvarious assets levels) would need to be added if the program is to growby X.)

III. Program Bank Allocation Process in One Embodiment

The Program Bank Allocation process determines which program banks130-140 will receive either a deposit or a withdrawal. The allocationprocess may be run after the processing of a sweep file, or at any otherconvenient time, e.g., every 2 hours, or after the cutoff time for thebanks, and may be based on a single sweep file or on multiple sweepfiles. Automatic emails are generated for the program banks that haveactivity, determining either a deposit or a withdrawal. The selfclearing broker dealer 100 receives a daily report that includes the netdaily activity for each program bank. The self clearing broker dealer100 approves the allocation and initiates the movement of funds viainstructions either to the intermediary bank and/or to one or moreprogram banks or an instruction to the broker dealers.

Program Banks—Withdrawal Example Process

The self clearing broker dealer 100 provides an instruction using amethod of instruction transfer to be discussed below. The program bank,upon receipt of the instruction, transfers funds from its MMDA to itsDDA. The funds are then wired from the DDA to the intermediary bank 110.

IV. PM (after Bank Cutoff Time) Sweep Transactions & Cash PerformanceAccount Activity

In some embodiments, customer transactions (primarily withdrawals) maybe received from some broker dealers BD_(i) after the cutoff time forthe programs banks. In this situation, the broker dealer BD_(i)transmits a late file that contains transactions that were processedafter the AM cutoff sweep. A second settlement takes place with thebroker dealer BD_(i) and funds are moved based on this settlement.

Cash Performance Account—the self clearing broker dealer may providecash management services (CPA) to the customers of the broker dealersBD_(i), which may comprise checks, debit cards, credit cards, ACH,and/or Automated Bill Pay, as noted above.

V. Hold Back Process

Funds are held back from at least one of the program banks in the AM(defined as before the bank cutoff time) allocation(s) to cover latewithdrawals. The dollar amount held back is determined based on priortransaction history.

The AM allocation process thus includes the hold back amount, as part ofits process. If the net activity for the AM allocation is a credit, theallocation process reduces the deposit to one or more of the programbanks by the hold back amount. If the net activity for the AM allocationis a debit, the allocation process increases the dollar amount of thewithdrawal by the hold back amount.

If late withdrawals are then received from the broker dealer BD_(i) in aPM (after bank cutoff time) sweep file, the self clearing broker dealer100 processes the file and wires funds to the broker dealer BD_(i) fromthe amount that was held back.

If the late withdrawals are Cash Management Services (checks, debits,etc.) provided by the self clearing broker dealer 100, then the selfclearing broker dealer 100 processes the transactions, and withdrawsfunds held back from the control operating account to pay for these CashManagement Service transactions.

Any funds held back but not utilized are deposited into the hold backbank at the end of the day. The PM allocation is run after PM sweepfiles, check, card and ACH files have been processed. The PM allocationprocess may also produce an uninsured report. If any accounts withbalances below the program limit are uninsured, the re-allocationprocess may in some embodiment attempt to try to insure the accounts viaan account swapping process.

VI. Nightly Process

In one embodiment, the self clearing broker dealer 100 provides thevarious broker dealers BD_(1-n) with the end of day files including aposition file that contains the program banks attached (holding thefunds of) to each customer account. The nightly files may be customizedfor one or more broker dealers. The customer bank deposit file may beprovided by the self clearing broker dealer 100 to the program banks andmay, in some embodiments, include a customer account number of theassociated broker dealer BD_(i), a tax ID number, and a balance for thatcustomer at the program bank, to name a few. The self clearing brokerdealer updates the accrual for each account as specified by the brokerdealer BD_(i).

VII. Daily Reconciliation Software Process

The self clearing broker dealer 100 also reconciles daily with theintermediary bank 110 and each of the program banks 130-140. Anyunfavorable differences are included as a customer liability whencomputing net capital, and as a credit in the broker-dealer's customerreserve computation. A transfer of funds to a reserve account is made toaccount for any deficiency determined in the reconciliation process.

VIII. Month End Process

The model in one embodiment uses an AM interest posting process at monthend. Interest is paid on the morning of the last business day of theperiod. The self clearing broker dealer 100 then provides each brokerdealer BD_(i) with month end statement files per their specifications.

In another embodiment the self clearing broker dealer may post interestfor select broker dealers on a day other than the last business day ofthe period. For example the broker dealer may elect to have interestposts on the 15^(th) of every month or on the 3^(rd) Friday of everymonth for his clients.

The invention is designed to operate in the context of a systemcomprising multiple program banks and a self clearing broker dealer. Oneintent of such an embodiment is to provide interest and FDIC insuranceabove the current FDIC limit for insurance for a single account for atleast some of the customers of various broker dealers BD_(1-n) and inthe same system, perform accounting functions on the distribution offunds used to accomplish this intent. In one example embodiment, therecould be eleven banks comprising program banks 1-10, and a holdbackbank. (The number of banks used in this example is merely forexplanatory purposes. More or less program banks can be used and moreholdback banks can also be used consistent with the intent of thepresent invention, and one or more of the holdback banks may be programbanks. Also other types of accounts may also be used in conjunction withthe bank accounts, such as non-FDIC insured money market accounts tohold excess funds, consistent with the intent of the present invention).In the example, assume that a broker dealer BD_(i) has a programoffering $1 million of FDIC insurance per customer account. A customer Aof this broker dealer BD_(i) deposits $800,000 with the broker dealer.The system of this embodiment receives sweep data from this brokerdealer BD_(i) comprising purchase data and withdrawal data for aplurality of customers of that broker dealer BD_(i), including the$800,000 purchase for customer A. These funds are first brought into thesystem via a control operating account in the intermediary bank 110. Thesystem operates to distribute the purchases across the program banks130-140. For the case of the $800,000 deposit for customer A, an amountof the current FDIC limit for insurance or less may be distributed toeach of a plurality of the program banks to obtain insurance for the$800,000.

In more detail, FIG. 1 discloses one embodiment, comprising a selfclearing broker dealer 100 that manages an aggregate interest-bearingaccount in each of a plurality of program bank 130-140, e.g., a moneymarket deposit account (MMDA). In one embodiment, the MMDA is pairedwith an aggregate demand deposit account (DDA), both being in theidentical name of the self clearing broker dealer or the like (referredto herein as an “MMDA-DDA pair”). In response to customer deposit andwithdrawal transactions, sweep files with customer purchase andwithdrawal transaction data are generated by the broker dealer BD_(i)and sent to the self clearing broker dealer 100. The self clearingbroker dealer 100 reaches a settlement with the broker dealer BD_(i) onthe amount of the sweep file net credit or net debit. In the case of anet credit, the broker dealer BD_(i) then wires the net amount to thecontrol operating account in the intermediary bank 110. The selfclearing broker dealer 100 then initiates an appropriate transfer offunds from the intermediary bank 110 either to the different programbanks 130-140 in the case of a credit to maximize insurance and based onvarious other rules, or from the program banks in the case of a debit.

As noted, in one embodiment the interest-bearing, insured aggregatedaccounts in which the managed balances for customers are deposited maybe MMDA's each paired with a DDA. If the self clearing broker dealer 100determines that it is necessary to move funds from a particular MMDA (ata particular program bank), first, it causes a messenger or othermechanism to have these funds transferred from the MMDA to the DDAmember of the MMDA-DDA pair, and second, it causes the funds in the DDAto be moved to the self clearing broker dealer's control operatingaccount at the intermediary bank 110. The self clearing broker dealer100 may send instructions to the intermediary bank to make a furthertransfer of funds from the control operating account to another party,e.g., the broker dealer BD_(i) or a third party transaction source(preferably by electronic or other automatic means). In contrast, iffunds are to be transferred into a particular MMDA, the self clearingbroker dealer 100 either may have them deposited into the associated DDAand then moved into the MMDA, or may have the funds deposited directlyinto the MMDA. The database listing customer funds is updated to reflectthese funds transfers.

Note that money market deposit account (MMDA) and demand deposit account(DDA) are set up in each of the program banks so that the customer fundsof multiple broker dealers BD_(1-n) are commingled and aggregated in atleast one of the program bank accounts, and preferably in multiple ofthe DDA-MMDA pairs. Thus, the self clearing broker dealer 100 does nothave to set up a separate money market deposit account (MMDA) andassociated demand deposit account (DDA) for each broker dealer BD_(i) atthe program bank, i.e., the same MMDA and/or DDA can be used acrossmultiple broker dealers BD_(i) if registered in the name of and offeredby the self clearing broker dealer 100.

As noted above, in one embodiment, the aggregated accounts in theprogram banks are money market deposit accounts (MMDAs) registered inthe name of the self clearing broker dealer 100 or the like that managesthe program. However, any other suitable investment accounts may beused, such as NOW accounts for individuals, or DDA's. Moreover, morethan one type of account may be used.

In one embodiment of an insured deposit program, multiple sweep filesare received from one or more broker dealers BD_(i) associated with thesystem 100 over the course of a period such as a day. Each sweep filecontains transaction activity from one or more broker dealers BD_(i).The timing and content of the received sweep file is determined as amatter of administrative convenience based on how the customertransactions are processed by their respective broker dealers BD_(1-n).In one embodiment, a sweep file may comprise data for deposit andwithdrawal transactions for one or more programs in which that brokerdealer BD_(i) is participating. Multiple sweep files may be received atthe same or different times of the day. Similarly, in anotherembodiment, a given sweep file may be an aggregation of sweep files froma given broker dealer BD_(i) and various correspondent entities.

An embodiment for processing sweep files will now be described. In oneembodiment, each sweep file from a broker dealer BD_(i) may be processedseparately and the credits and debits allocated to the accounts of therespective customers associated with the credit and debit transactions.The allocation process may then be run at any time to determineelectronically in the case of a credit from the sweep data, anallocation of funds to one or more of the plurality of FDIC-insured andinterest-bearing aggregated accounts at the program banks, so that FDICinsurance coverage greater than the maximum FDIC insurance coverage fora single account is effectively provided for at least one customer andto determine electronically, in the case of a debit from the sweep dataan allocation, of one or more withdrawals of funds from one or moreprogram banks. The allocation process can be run after the processing ofeach sweep file, or after all the sweep files have been processed, or itcould be run at specific times during the processing day (for exampleevery hour). In one embodiment, the allocation process is run after allthe AM sweep files (defined as up to the bank cutoff time) have beenprocessed. In a further embodiment, if a broker dealer BD_(i) tended torun late, the system would not hold up the allocation processing forthat one broker dealer BD_(i). Rather, the system would run the processwith the sweep files that have been received and then rerun theallocation process when the missing file is received.

Note that the instruction generating step does not need to followimmediately after the running of an allocation process. For example, thesystem could run the allocation process periodically, e.g., every twohours, but the system need not generate the instructions to move thefunds between banks until the system had run the final allocation forthe sweep files received before the bank cutoff time from the variousbroker dealers BD_(i).

Processing for a First Sweep File:

-   -   i. First program bank target amount allocation—This process        incorporates the first sweep purchases and redemptions into        respective customer accounts. The process may further include        any pre-paid interest, and holdback accounting. The process then        allocates amounts to the respective program banks associated        with the program based on one or more rules. Such rules may        include, for example, ensuring that a given amount allocated to        a program bank fits within a respective maximum bank cap and a        minimum bank cap set for the respective program bank. In one        embodiment, these allocated amounts may be target balance        amounts that are fixed for the remainder of the period in order        to minimize program bank wires. In such an embodiment, the first        sweep is generally run as close to cutoff time as possible. Note        that in other embodiments, the bank allocation amount may be        fixed as part of a later sweep.    -   ii. A first account allocation—This process then allocates all        customer accounts across the program banks participating in the        system to fit the bank amount allocation above and attempts to        obtain the maximum FDIC insurance under the particular program        or programs associated with the sweep data.    -   iii. In another embodiment the system may spread the small        accounts (less than the current FDIC limit for insurance) across        all of the program banks and the allocation process may allocate        each customer transaction to a specific program bank.

Processing for a Subsequent One or More Later Sweeps:

-   -   i. A second transaction allocation—This processing incorporates        second sweep purchases and redemptions into the respective        customer accounts and then reallocates all accounts across the        program banks to fit the fixed amounts allocated to the        respective program banks.    -   ii. In a different embodiment, the allocation process may        allocate each customer transaction in subsequent sweep files to        a specific program bank without regard to any previously set        fixed amount for the program bank.

As noted in the summary above, the self clearing broker dealer 100 isdesigned to run a first allocation that comprises two allocationprocesses: a bank amount allocation process, which allocates fundamounts between/among the banks 130-140, and a customer account balanceallocation among the plurality of the program banks to attempt tomaximize insurance under the program.

The following describes this process in more detail:

First Bank Amount Allocation:

This process incorporates the first sweep purchases and redemptions intothe respective customer accounts. The first bank allocation then assignsfund amounts to the program banks based on various rules, such asfitting within maximum bank caps, minimum bank caps. The process mayalso include a procedure for handling fully liquidated accounts and mayincorporate a “holdback” amount from a holdback process into the bankamount totals.

A holdback process may also be used in one embodiment to receive lateday activity (e.g., second dollar sweep data that includes late daycustomer purchase and withdrawal data). In the hold-back procedure forfunding late withdrawals, funds are held back from one or more selectedprogram banks, designated holdback banks, to cover the late withdrawals.A bank may be designated a holdback institution if it agrees to atemporary withdrawal of funds from its account which may be later usedto settle late day customer service and fee transactions, for example,transactions for credit/debit cards/checks/ACH/fees, to name a few, thatmay become available for processing after the daily bank settlementdeadline (the time after which the bank will not take new transactions),typically 4:00 pm. The amount held back from pre-cutoff transactions maybe estimated based on prior transaction history. The holdback withdrawalprocess may be factored into the first runs and/or later runs of thebank allocation process on the sweep files. The allocation process willtake into account the amount to be held back from a holdback bank in itsdistribution of funds allocated to or withdrawn from the given holdbackbank. In one embodiment, if the net activity is a credit, the aggregatedeposit to be allocated to the program banks is reduced by the hold backamount. For example, if the hold back amount is 5 million and the netactivity is a credit of 10 million, the process would allocate 5 millionto the program banks and leave the other 5 million in the controlaccount in the intermediary bank 110 for late transactions. Any fundsnot used to cover late transactions would be deposited into the holdback.

To facilitate this process, in one embodiment a daily holdback amount isdefined prior to the first bank amount allocation and the first accountallocation. As noted, a balance at the holdback bank may either bereduced by the previously defined holdback amount at the end of thefirst or a later allocation. This money is debited from the holdbackbank and wired and is credited to the program's control operatingaccount which, in one embodiment, is held in the intermediary bank 110,which may or may not be a program bank. In a different embodiment, theamount held back in the control operating account for satisfying debitscould come from reducing the net deposits to be allocated from thecontrol operating account among the program banks. The account at theintermediary bank could comprise only a DDA control operating account,or it might comprise a DDA control operating account that also has anassociated MMDA. The money is ‘held back’ with the intention ofoffsetting actual redemptions coming in with second or later sweepactivity. The amount to be held back correlates, in one embodiment, tothe historical transaction activity and/or number of broker dealersreceiving clearing services from the self clearing broker dealer, aswell as checking account, ACH, debit account activity, and line bill payservices, to name a few. Thus, in one embodiment, a holdback bank isdesignated and an amount of funds is determined to be held back, eitherfrom a deposit allocation to the program banks or by debiting theholdback bank, at least in part, based on a number of broker dealers whoare receiving clearing services from the self clearing broker dealerand/or an amount of transaction activity of one or more of the brokerdealers being cleared by the self clearing broker dealer.

In one embodiment of the process, all of the program banks in theprogram (except in some embodiments the holdback bank and/or a safetybank) receive one wire a day as part of the sweep processing and firstbank account allocation. The bank balances resulting from the bankamount allocation and account allocation become ‘target balances’ foraccount allocations for subsequent sweep processing. Note that in someembodiments, the target balances for the aggregated accounts may be setafter processing for a later sweep and allocation. Also, note that theuse of target balances is one embodiment example, and the present designdoes not require use of target balances.

Referring to the bank amount allocation process, this allocation processmay serve one or more of several purposes, such as, for example, tomaintain substantially stable deposit funds at a program bank by theself clearing broker dealer 100 by limiting deposit/withdrawal activity,to ensure that activity at the banks 130-140 comply with federalregulations such as FDIC regulations, to ensure compliance with a creditpolicy, and to insure compliance with specific rules set by thecustomer, the broker dealer BD_(1-n), or the branch.

First Account Allocation Processing:

In one embodiment, after the respective purchases and redemptions havebeen processed, the accounts are grouped by taxpayer identificationnumber (TIN) and sorted in descending order based on total TIN balance(highest to lowest). The allocation proceeds account by account todetermine which program banks will receive the customer balance(comprising the day's opening balance for the account, plus first sweeppurchases, minus first sweep redemptions for each account). Theallocation method distributes the account assets to the Program banksbased on the TIN balance and based on the type of allocation businessrules set for that customer account. Note that the business rules may beattributed to an account directly at the customer account level, or tomultiple accounts at the broker or office/branch level.

The customer account balance allocation/reshuffling step may be subjectto various additional account specific rules and broker dealer officeand/or branch office level rules. In one embodiment of business rulepriority, customer account specific rules may be used first to directthe customer account balance allocation. If the customer has opted outof a particular program bank, for example, because the customer hasfunds in that bank via an account with another financial entity, or thecustomer has designated that the first the current FDIC limit forinsurance is to be deposited in a particular bank, then the customeraccount balance allocation will follow these rules in making theallocation of that customer's balance. Then the customer account balanceallocation process follows broker dealer office/branch level allocationbusiness rules in allocating multiple accounts of the given brokerdealer BD_(i) in an order and amount specified by the applicablerule(s). Thus, the customer account balance allocation process firstallocates non-zero balance accounts according to customer accountspecific rules, then the process follows office/branch level BusinessRules in a descending aggregated account balance order. Finally, thecustomer account balance allocation process allocates non-zero balanceaccounts not subject to any of the above applicable Business Rules indescending account balance order. The allocation/reshuffling of customeraccount balances may also follow certain other business rules tominimize the volume of account balance redistributions required to matchwith the program bank amount allocation. Likewise, a rule may befollowed that no more than six withdrawals in a particular manner may bemade from a given program bank during a period such as a month. Otherallocation rules may be set by the individual account holder, the brokerdealer BD_(i), and the self clearing broker dealer 100.

Referring again to FIG. 1, the self clearing broker dealer 100 isconfigured to allocate and manage deposits, withdrawals and othertransactions relating to each of the aggregated accounts in each of theprogram banks 130-140. The self clearing broker dealer system tracks thenet activity for the aggregated accounts maintained by the self clearingbroker dealer at the program banks 130-140 based on informationgenerated by its own computers, e.g., instructions, wires and othercommunications, and/or from the sweep files sent by the broker dealersto the self clearing broker dealer 100, and/or from other appropriatesources via contract or otherwise. The self clearing broker dealersystem 100 maintains records on each broker dealer BD_(i) and theirrespective customers with funds in one or more of the program banksmanaged by the self clearing broker dealer 100. Thus, in one embodiment,the self clearing broker dealer 100 maintains account records for all ofthe customer accounts of the broker dealers BD_(1-n) with funds managedby the self clearing broker dealer 100.

As explained more fully below, the self clearing broker dealer 100 mayautomatically generate reports, for example, in the form of e-mailmessages, text messages, faxes, etc., advising the broker dealersBD_(1-n) of the day's net activity for the aggregated accounts in themultiple program banks holding funds for that broker dealer BD_(i),and/or for activity in one or more customer accounts of that brokerdealer BD_(i). If more than one aggregated MMDA account is maintained ata given program bank, each account may be settled separately. The selfclearing broker dealer 100 maintains or has maintained for it computersoftware and/or hardware located at a main management system site, or atone or more remote sites that are in communication with the selfclearing broker dealer 100, and also maintains databases and otherprogram functions to track the activities in the various aggregatedaccounts in each of the program banks 130-140. Examples of such computersoftware and/or hardware will be discussed below.

Subsequent Sweep Processing:

Account Processing:

As noted earlier, there may be multiple sweeps and multiple sweepprocesses run. When data for a last sweep of the day arrives (referredto in this embodiment as the “second sweep”), the second bank allocationprocess wires between the control operating account in the intermediarybank 110 and the holdback bank the net of the holdback amount and allsecond sweep transactions, including:

second sweep purchases

second sweep redemptions.

Reports and wiring instructions are also generated from this process.This second bank allocation process allocates the transactions items tothe respective customer accounts. As previously noted, in one embodimentthe balances in the program banks from an earlier allocation during theday, or from a previous day, or after the first allocation become thetarget balances for the account allocation, for the remainder of theperiod. The second account allocation reallocates or reshuffles theindividual accounts to banks to fit the target balances set previouslyat the respective program banks.

As noted for FIG. 1, the self clearing broker dealer 100 manages thewithdrawal of funds from the program banks in order to satisfy a netdebit. There are a variety of embodiments of the withdrawal process thatmay be implemented. In one embodiment, a manner of making thewithdrawals from at least one of the FDIC-insured and interest-bearingdeposit accounts preserves that account's interest-bearing statusregardless of the number of the withdrawals and/or transfers from the atleast one of FDIC-insured and interest-bearing aggregated account madeduring a month. This manner of making embodiment can be implemented byensuring that no more than some predetermined number of withdrawals aremade using a method that implicates the 6 withdrawal limit and that allother withdrawals from that account during the month are made either inperson, or by mail, or by messenger, or by telephone and distributed bymail, or by automated teller machine, or a combination thereof so thatthe insured and interest-bearing status of the aggregated depositaccounts is preserved. As noted, in one embodiment, a restriction to oneof the methods listed above for withdrawals made from the aggregatedaccount at the respective program bank is imposed for a substantialportion of a month, but for the remainder of the month, e.g., aremaining 5 days, withdrawals are made by a method that counts againstthe 6 withdrawal limit, e.g., electronically, such as by wire.

Alternatively, after five withdrawals are made per se, or are made usinga method that implicates the 6 withdrawal limit, then all or a portionof the funds in the MMDA can be transferred to a DDA at the same programbank.

Alternatively, a process can be used to ensure that no more than apredetermined number of withdrawals, e.g., 6, are made from theinterest-bearing FDIC-insured aggregated account at the program bankduring the period. If additional funds are required during the period,they are obtained via a withdrawal from another of the program banks.Accordingly, a withdrawal of funds from the overall program bank groupcan be made every day of the month, but the process is set to ensurethat no more than some number such as 6 withdrawals are made from anyone program bank during the period.

FIG. 3 is a block diagram showing an Internet-based self clearing brokerdealer system, generally designated by reference number 300, accordingto an exemplary embodiment of the present invention. It should beappreciated that the aggregated account self clearing broker dealersystem 300 according to the present invention need not beInternet-based, but may instead, for example, be part of a closednetwork that allows limited access to bank and broker dealer records toobtain an enhanced level of security or it may be an open system withother means of security used. The self clearing broker dealer system 300includes a memory, which may be a distributed memory, and which maycomprise one or more databases. In the embodiment illustrated in FIG. 3,the memory comprises a customer database 305 for maintaining a separateaccount for each of the customers of the broker dealer clients of theself clearing broker dealer, with information on the funds of thecustomer and how they are distributed among the plurality of programbanks 130-140. The memory may further comprise an accounting database360 that includes parameters to be used in performing various accountingfunctions relating to the customer accounts, and a database 370 holdinginformation on the various broker dealer clients of the self clearingbroker dealer 100. Note that the three databases may be comprised in asingle or in multiple memory structures and may be aggregated orseparate. The self clearing broker dealer system further comprises a CPU310 for executing a program bank allocation program 312, a clearinginstruction generator program 314 that generates instructions for theintermediary bank 110 and the program banks 130-140 to move fundstherebetween, an accounting program 316 for performing one or moreaccounting functions on the customer accounts and/or the broker dealeraccounts including calculating interest, and a reconciliation program318 for performing a reconciliation function. Program code for updatingone or more of the databases based on the output from the accountingprogram 316 and the allocation program 312 is also provided. The CPU 310executes code to perform the various management functions of the selfclearing broker dealer system 300 and the different programs. The selfclearing broker dealer system 300 communicates with the respectivecomputer systems of one or more broker dealers BD_(1-n) the programbanks 130-140, and the intermediary bank 110 via one or more electronicportals to manage the aggregated accounts held at each program bank tomaximize insurance for the funds in the various customer accounts and/orincrease the safety of that money.

The bank allocation program 312 allocates the net of the deposit dataand withdrawal data from the sweep files to the aggregated accounts inthe program banks. The system further includes a message generator 320that generates one or more messages regarding withdrawal of funds fromor deposit of funds to each of the aggregated accounts in the programbanks. (Note that these messages are different from the instructionsgenerated in the instruction generator 314.) Messages may, for example,be in the form of e-mail, facsimile, text message or other form ofcommunication. Such messages may be sent to the broker dealers BD_(1-n)and/or the program banks for providing notice of an action or requestfor approval of an action. For example, various messages may beexchanged between a respective broker dealer BD_(i) and the selfclearing broker dealer in reaching a settlement agreement for a givenone or more sweep files. Additionally, messages may be generated thatprovide information on the amount withdrawn or deposited in variousprogram banks. Additionally, messages may be generated providinginformation on deposits and withdrawals in individual customer accounts,the interest rate tiers currently being applied, and fund amountsassociated with a given broker dealer BD_(i) and the interest that thebroker dealer BD_(i) is obtaining based on that fund level.

Additionally, self clearing broker dealer system 300 may include areporting system 340 for monitoring and generating reports on variousaspects of the operation, including the customer account balancesdeposited in each of the program banks. Additionally, the system 300 mayinclude a display interface 350 with local and/or remote monitoring.Additionally, the self clearing broker dealer system 300 may includecommunications and miscellaneous interfaces 330. The communicationsinterface could connect to one or more electronic communicationsnetworks.

Embodiments within the scope of the present invention include programproducts comprising machine-readable media for carrying or havingmachine-executable instructions or data structures stored thereon. Suchmachine-readable media can be any available media which can be accessedby a general purpose or special purpose computer or other machine with aprocessor. By way of example, such machine-readable media can compriseRAM, ROM, EPROM, EEPROM, CD-ROM or other optical disk storage, magneticdisk storage or other magnetic storage devices, or any other mediumwhich can be used to store desired program code in the form ofmachine-executable instructions or data structures and which can beaccessed by a general purpose or special purpose computer or othermachine with a processor. Combinations of the above are also includedwithin the scope of machine-readable media. Machine-executableinstructions comprise, for example, instructions and data which cause ageneral purpose computer, special purpose computer, or special purposeprocessing machines to perform a certain function or group of functions.

Embodiments of the invention have been described in the general contextof method steps which may be implemented in one embodiment by a programproduct including machine-executable instructions, such as program code,for example in the form of program modules executed by machines innetworked environments. Generally, program modules include routines,programs, objects, components, data structures, etc. that performparticular tasks or implement particular data types. Multi-threadedapplications may be used, for example, based on Java or C++.Machine-executable instructions, associated data structures, and programmodules represent examples of program code for executing steps of themethods disclosed herein. The particular sequence of such executableinstructions or associated data structures represent examples ofcorresponding acts for implementing the functions described in suchsteps.

Embodiments of the present invention may be practiced in a networkedenvironment using logical connections to one or more remote computershaving processors. Logical connections may include a local area network(LAN) and a wide area network (WAN) that are presented here by way ofexample and not limitation. Such networked environments are commonplacein office-wide or enterprise-wide computer networks, intranets and theInternet and may use a wide variety of different communicationprotocols. Those skilled in the art will appreciate that such networkcomputing environments will typically encompass many types of computersystem configurations, including personal computers, hand-held devices,multi-processor systems, microprocessor-based or programmable consumerelectronics, network PCs, minicomputers, mainframe computers, and thelike. Embodiments of the invention may also be practiced in distributedcomputing environments where tasks are performed by local and remoteprocessing devices that are linked (either by hardwired links, wirelesslinks, or by a combination of hardwired and wireless links) through acommunications network. In a distributed computing environment, programmodules may be located in both local and remote memory storage devices.

It should be noted that although the flow charts provided herein show aspecific order of method steps, it is understood that the order of thesesteps may differ from what is depicted. Also two or more steps may beperformed concurrently or with partial concurrence. Such variation willdepend on the software and hardware systems chosen and on designerchoice. It is understood that all such variations are within the scopeof the invention. Likewise, software and web implementations of thepresent invention may be accomplished with programming techniques withrule based logic and other logic to accomplish the various databasesearching steps, correlation steps, comparison steps and decision steps.It should also be noted that the word “component” as used herein and inthe claims is intended to encompass implementations using one or morelines of software code, and/or hardware implementations, and/or manualoperations.

While this invention has been described in conjunction with theexemplary embodiments outlined above, it is evident that manyalternatives, modifications and variations will be apparent to thoseskilled in the art. Accordingly, the exemplary embodiments of theinvention, as set forth above, are intended to be illustrative, notlimiting. Various changes may be made without departing from the spiritand scope of the invention.

What is claimed:
 1. A system, comprising: one or more computerscomprising memory wherein the memory stores computer-readableinstructions comprising program code that, when executed, cause the oneor more computers to perform the steps: maintaining or having maintainedor accessing, using the one or more computers, one or more electronicdatabases, stored on one or more computer-readable media, comprising:aggregated deposit account information for a plurality of respectiveFederal Deposit Corporation Insurance (FDIC)-insured andinterest-bearing aggregated deposit accounts held in a plurality ofdepository institutions participating in a program, with the aggregateddeposit accounts providing non-penalized liquidity for the funds heldtherein, the aggregated deposit account information for a respectiveaggregated deposit account comprising a balance of funds held in therespective aggregated deposit account; and client account informationfor a plurality of client accounts of a plurality of clients, with eachof the clients associated with one of the depository institutions, theclient account information for a respective one of the client accountscomprising a balance of client funds held in other of the depositoryinstitutions, to which the respective client account is not associated,in the one or more aggregated deposit accounts held therein; andobtaining, using the one or more computers, transfer instructions forone or more clients associated with one or more of the depositoryinstitutions over a month period, with the transfer instructions for arespective one of the clients associated with one of the depositoryinstitutions to transfer an amount of funds of the respective client toor from the client account of the respective client; allocating, usingthe one or more computers, fund amounts to or from the other depositoryinstitutions to be deposited to or withdrawn from the aggregated depositaccounts therein based at least in part on the transfer instructions forthe plurality of the client and one or more rules; generating data,using the one or more computers, for depositing/transferring funds to orwithdrawing/transferring funds from at least one of the aggregateddeposit accounts multiple times in a month period, based at least inpart on the transfer instructions, the data generating step comprisinggenerating data for instructions fbr making a withdrawal/transfer fromfunds held at a respective one of the depository institutions more thansix (6) times during the month period, comprising presentinginstructions to the respective one depository institution using one ormore of the methods: in person, or by mail, or by messenger, or bytelephone and distributed by mail, or by automated teller machine, or acombination thereof tbr substantially all of the withdrawals/transfersexcept for a set of at least one but not more than six withdrawalswithin a last six business days of the month period, and presentinginstructions to the respective one depository institution using a methodthat counts against a six (6) withdrawal limit for this set of thewithdrawals during the last six business days of the month period; andupdating or having updated, using the one or more computers, the one ormore electronic databases to reflect changes in client account fundsheld in the aggregated deposit accounts based at least in part ontransfer instructions.
 2. The system as defined in claim 1, wherein theinstructions for withdrawal/transfer that count against the six (6)withdrawal limit are presented in each of the last five (5) businessdays of the month and are presented by electronic communication.
 3. Thesystem as defined in claim 1, wherein the one or more depositoryinstitutions comprises only the first depository institution.
 4. Thesystem as defined in claim 1, wherein the one or more depositoryinstitutions comprise a plurality of depository institutions, andwherein the generating data for instructions to deposit/transfer fundsto or withdraw/transfer funds from the one or more aggregated depositaccounts based at least in part on one or more of the net credit/debitamounts further comprises: transferring funds of a respective clientonly to one or more depository institutions which hold less than aspecified amount of the funds of the respective client account.
 5. Thesystem as defined in claim 1, wherein the instructions forwithdrawal/transfer that count against the six (6) withdrawal limit arepresented in the last five (5) business days of the month and arepresented by wire and/or by Automated Clearing House (ACH).
 6. Thesystem as defined in claim 1, wherein the system of presentation of theinstructions for withdrawal/transfer that counts against the six (6)withdrawal limit is by an electronic system.
 7. The system as defined inclaim 1, wherein one of the one or more rules for allocation comprisesallocating funds of a respective client account only to one or moredepository institutions which hold less than a specified amount of thefunds of the respective client account.
 8. The system as defined inclaim 1, wherein one of the one or more rules for allocation comprisesallocating funds to respective depository institutions so as not toexceed a maximum cap for the respective depository institution and/ornot to go below a minimum cap for the respective depository institution.9. The system as defined in claim 1, wherein one of the one or morerules for allocation comprises allocating funds to a respective one ofthe depository institutions based, at least in part, the fact of or anamount that the one depository institution has sourced funds to theprogram which are held in one or more other of the depositoryinstitutions.
 10. The system as defined in claim 1, further comprising:allocating, using the one or more computers, fund amounts of clientaccounts among the aggregated deposit accounts, to substantially matchthe respective fund amounts allocated to the aggregated depositaccounts, based at least in part on the client account data for theclient account funds and one or more rules.
 11. The system as defined inclaim 1, wherein the system steps are performed by a self-clearingbroker dealer, and wherein the accessing client account data comprisesreceiving deposit and/or withdrawal sweep data from one or more otherbroker dealers, with the deposit and/or withdrawal sweep data comprisingdeposit and/or withdrawal data for respective customers holding customeraccounts with the one or more broker dealers.
 12. The system as definedin claim 1, further comprising the self-clearing broker dealerperforming the steps: maintaining the plurality of FDIC-insured andinterest-bearing aggregated accounts in the depository institutions,with at least one of the aggregated accounts at one of the depositoryinstitutions holding funds of multiple of the broker dealers;performing, using the one or more computers, an electronic accountingfunction on a substantially periodic basis based on client account dataassociated with the respective broker dealers, wherein the electronicaccounting function is performed for the client accounts of theassociated broker dealer based on at least one accounting parameterassociated with the respective broker dealer or the respective customerfrom a group of a rate chart to be paid on funds of client accountsassociated with the respective broker dealer, one or more levels of FDICinsurance associated with client accounts associated with the respectivebroker dealer, and one or more depository institutions that areassociated with the client accounts associated with the respectivebroker dealer for holding funds of those client accounts or areprohibited from holding funds of those client accounts.
 13. The systemas defined in claim 1, further comprising replacing at least a portionof money withdrawn of one of the broker dealers from one of thedepository institutions by depositing money from another of the brokerdealers into the one depository institution.
 14. The system as definedin 1, wherein the changes to client account funds are sourced from aplurality source financial entities.